Wild horses can't drag couple away from equestrian farm. Will another lawsuit?
Tuesday, October 27, 2015
Crain's Chicago Business
by Dennis Rodkin
The fight over a foreclosed 400-acre horse farm in Barrington Hills has taken another nasty turn, with the Cook County Forest Preserve District accusing its former owners of criminal contempt of court for refusing to remove their horses.
The district and a Barrington Hills couple have been jockeying for two years for control of the picturesque estate called Horizon Farm and its 10,000-square-foot mansion since the forest preserve district bought the property's $14.5 million defaulted mortgage.
The couple, Richard and Meryl Squires Cannon, were evicted in 2014 but won't move their horses off the property, saying they have a right to use it under a lease that predates the district's ownership. The county says the lease is bogus.
Meanwhile, the property's mansion and guesthouse have stood vacant. The buildings sit behind an iron gate at the top of the property, with an expansive view out over a shallow valley to a horizon filled with trees. The mansion, a broad home with multiple gables, a square tower and a big back porch that takes in a view of the horse pastures, shows signs of long-deferred maintenance, including large patches of weather-beaten wood denuded of paint.
"It's all standing there deteriorating," said Richard Cannon, a patent lawyer. Cannon and his wife, a pharmaceutical executive, live less than a mile away in a home on Goose Lake Drive that they owned before they bought the horse farm in 2006 for $19.3 million. The Cook County Assessor estimates their home's market value at $1.24 million.
Meryl Squires Cannon is on the disputed property twice a day, tending to the horses she keeps there. After four yearlings were moved to a Texas training farm last week—"They're going to be great racehorses one day," she said—a dozen horses are still on the property.
Yesterday morning, at least six were out in the farm's vast paddocks, which lie a short distance downhill from the mansion and guesthouse.
The forest preserve district wants them off the land. The district sued in August, accusing the Cannons of criminal contempt of court for continuing to keep their horses there long after being evicted. Also in August, Meryl Squires Cannon filed a civil-rights case against the district over an August 2014 incident in which she was arrested on the property while caring for the horses. She was ultimately found innocent of criminal trespass, but she alleges she was deprived of her liberty while handcuffed and detained for a couple of hours and that the forest preserve district's police officers arrested her primarily to intimidate her.
The Cannons say they can keep horses on the property under terms of a lease with a Florida entity signed before the forest preserve took ownership. The forest preserve disputes that argument, saying both the landlord and the renter on the lease are Cannon family ventures.
"They're leasing the property to themselves," said Christopher Carmichael, a lawyer in Holland & Knight's Chicago office who represents the district in the petition for criminal contempt.
Richard Cannon calls Carmichael's statement "more than a bit ridiculous." He said the lease is with Royalty Farms, an entity whose majority owner is "a gentleman that lives in Florida and that I'm not authorized to talk about." He said Meryl Squires Cannon is "a minority owner and employee" of Royalty Farms.
JUDGE ORDERS TRAILS CLOSED
State records list only Meryl Squires Cannon as a member of Royalty Farms. She declined to discuss the details of its ownership. She is also CEO of Barrington-based Merix Pharmaceutical.
Earlier this year, the forest preserve opened four miles of public bike and equestrian trails on the disputed property. But in late September, Cook County Circuit Court Judge Martin Kelley ordered the district to close the trails while the cases proceed.
The present skirmishes over the land trace back to 2006, on the eve of the Cannons' purchase, said Bob Slobig, a lawyer with Torshen Slobig Genden Dragutinovich & Axel who represents the couple in two cases. When the closing date was imminent, lender Amcore Bank "changed the terms of the ($14.5 million) loan and held them over a barrel," Slobig said. The couple couldn't walk away from the deal, he said, "because they would lose the $2 million they had put in."
The changes in the mortgage included setting a large balloon payment to come due in just a few years, "setting them up to fail," he said.
The Cannons failed to make the balloon payment in May 2009, and Rockford-based Amcore started foreclosure the next month. While Slobig was pursuing a case alleging that Amcore had violated truth-in-lending laws, federal regulators closed the bank and the Cannons' mortgage was assigned to BMO Harris Bank, which sold it to the forest preserve district for $14 million in June 2013.
The Cannons later sued both BMO Harris and the forest preserve over that transaction.
"The forest preserve went about the transaction in an underhanded way that we believe is contrary to law and does not show the transparency that the taxpayers would expect," Slobig said.
Patrick O'Herlihy, a spokesman for BMO Harris, said the firm does not comment on ongoing litigation.
The various lawsuits, at least five, are at different stages of hearing or appeal, none of them fully resolved.
The forest preserve district has not discussed any plans for the Horizon Farms mansion and guest house if its ownership claim prevails. Signs posted on entrances to the farm announce the June 2014 eviction of all occupants.
Nevertheless, six horses nibbled grass and strolled across the landscape yesterday morning, oblivious to the legal wrangling going on around them.