Highland County commissioners file complaint for foreclosure against hotel developers

In the latest legal action taken by the Highland County Board of Commissioners against the prospective developers of the Marriott Hotel project in Hillsboro, the county has a filed a complaint for foreclosure on all three parcels involved, as discussed at the Thursday, Oct. 15 Hillsboro City Council meeting.

Hillsboro safety and service director Shawn Adkins told council that he was made aware Thursday that “the county has filed foreclosure on all three properties” involved with the would-be Marriott Hotel development. He said that he reached out to LEO Capital Investments LLC, the prospective developers of the Marriott Hotel project, and received a written statement, which he forwarded to council.

As previously reported, a Summit County judge ruled in favor of the Highland County Board of Commissioners in their cognovit action against LEO Capital Investments LLC on Aug. 18.

The hotel project has been in the planning stages since 2019. Since June, the county has been seeking “payment in full,” initially estimated at $815,759.32 or more, from developers for defaulting on their $1 million promissory note. Upon the agreement of both parties, Summit County Common Pleas Court Judge Kelly McLaughlin issued an order Aug. 18 granting judgment “against Defendant LEO Capital Investments, LLC on the Cognovit Note” in the amount of nearly $850,000, plus “interest … and expenses that continue to accrue under the Cognovit Note.”

According to court records, the complaint for foreclosure was filed Oct. 1 in Highland County Common Pleas Court by attorney Susan Argo of Bricker Graydon Wyatt LLP — who also filed the Summit County cognovit promissory note complaint — on commissioners’ behalf. Listed as defendants are LEO Capital Investments, LLC, the would-be developers; EM1 Capital LLC and Tilted Popcorn, LLC, both of whom “may claim an interest in the real property by virtue” of separate mortgages; and the Highland County Treasurer, which “holds, or may claim, a lien on the real property for unpaid real estate taxes and assessments.”

The three parcels involved are 1308 North West Street, which is “the mortgaged parcel;” 711 Harry Sauner Road; and 1290 North West Street.

“The Mortgage granted Plaintiff a security interest in the Mortgaged Parcel (Parcel No. 25-10-000-144.04) only, which is more fully described in the legal description attached to the Mortgage,” the foreclosure complaint says. “The Mortgage does not encumber the Non-Mortgaged Parcels. Plaintiff’s Judgment Lien, by contrast, encumbers all three parcels comprising the Real Property.

“Plaintiff claims first priority only as to the Mortgaged Parcel (Parcel No. 25-10-000-144.04). As to the Mortgaged Parcel, the Mortgage is the first and best lien, senior to the Tilted Popcorn Mortgage and the EM1 Mortgages, and subject only to the lien of the Treasurer for real estate taxes and assessments. Plaintiff does not claim first priority as to the Non-Mortgaged Parcels.”

As previously reported, commissioners voted in October 2023 to approve the open-end mortgage, cognovit promissory note and loan agreement contract with LEO Capital Investment LLC in the amount of $1 million. 

According to the foreclosure complaint, “The Loan Agreement, among other restrictions, also prohibited LEO from transferring or selling any portion of the Project Property. Any such transfer or sale would immediately accelerate the Loan, rendering all outstanding principal and accrued interest due and payable.

“Despite receiving the loan proceeds, LEO failed to complete construction and development of the Project Property contemplated by the Loan Agreement, thereby triggering events of default under the Loan Agreement, Note, and Mortgage,” Argo wrote in the complaint.

Similar allegations were made in the Summit County action, leading to the judge ordering “judgment in [the county’s] favor and against Defendant LEO Capital Investments, LLC on the Cognovit Note in the amount of $815,759.32 as of June 2, 2026, plus interest at the rate of 2%, late fees, attorneys’ fees of $31,209.75 and costs of $334.75 as of August 12, 2026, and expenses that continue to accrue under the Cognovit Note.”

According to the foreclosure complaint, commissioners “filed a Certificate of Judgment” in that amount in Highland County Common Pleas Court in September, “thereby creating a valid judgment lien against the Real Property.”

Argo lists three counts in the foreclosure complaint: foreclosure of mortgage and judgement lien; breach of guaranty; and receiver.

For the foreclosure count, Argo argued that “As set forth above, the Note and Guaranty secured by the Mortgage are in default, under the terms of the Mortgage. 

“As a consequence of said default, the terms of the Mortgage have been breached, and Plaintiff is entitled to have its Mortgage and Judgment Lien on the Real Property foreclosed,” Argo wrote. “Plaintiff is authorized under the Mortgage to recover the costs and expenses incurred, including attorneys’ fees and expenses incurred necessary at any time for the protection of its interests under the Mortgage.” 

The county is seeking “that the mortgage and the judgment lien be foreclosed” and all related foreclosure actions be granted. 

For the breach of guaranty count, Argo argued that “LEO absolutely and unconditionally guaranteed the full and prompt payment and performance of all obligations and indebtedness owed by LEO to Plaintiff, including, but not limited to, LEO’s obligations under the Note. 

“The Guaranty is in default as a result of, among other things, LEO’s failure to comply with the terms of the Loan Agreement and Note,” the complaint says. “As a consequence of LEO’s breach of the Loan Agreement, LEO owes Plaintiff for the Guaranty, the sum of the outstanding amount due of $815,759.32, plus additional charges incurred by Plaintiff recoverable under the Loan Agreement, including but not limited to additional attorneys’ fees and costs incurred by Plaintiff’s enforcement of the Loan Agreement including this action.”

The county is seeking “judgment in its favor for breach of the Guaranty in an amount equal to all sums due and owing under the judgment including accrued interest, attorney’s fees, costs and all other recoverable amounts under the Guaranty.” 

In the third count, receiver, the county is seeking “the appointment of a receiver.” Argo argued that “The appointment of a receiver is necessary to preserve and protect the Real Property, prevent waste, maintain the value of the collateral securing Plaintiff's indebtedness, and protect Plaintiff's interests pending the resolution of this action.” 

No hearings have been scheduled in this case as of this article’s posting.

According to communications from Ankur Patel of LEO Capital to the city of Hillsboro, developers are “handling this matter.

“We have informed the County that will be paid off with the new loan at the start of the construction loan,” Patel wrote to Adkins. “We are awaiting a pay off letter from them for November. We will protect all of our legal rights in this project and are handling this matter. 

“We are acting in good faith and don't want to escalate their matter; our full plan is simply to pay them off and move on.”