The owners of Horizon Farms -- a 400-acre Barrington Hills estate and horse farm -- have filed a federal lawsuit accusing the Forest Preserve District of Cook County of conspiring to pay $14 million for their Barrington Hills horse farm while they were fighting foreclosure.
Owners Meryl Squires Cannon and Richard Kirk Cannon say in the lawsuit that they purchased the property -- among the largest in the Northwest suburbs and home to more than 40 of their show and race horses -- for $19.3 million in 2006 after obtaining a $14.5 million loan from Amcore Bank.
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In 2009, Amcore initiated foreclosure proceedings against the Cannons. That same year, the complaint alleges, Amcore failed and the Federal Deposit Insurance Corp. took over its assets. The FDIC then entered into an agreement with BMO Harris Bank by which BMO Harris took ownership of the $14.5 million loan agreement, according to the complaint. Meanwhile, foreclosure proceedings continued, with the Cannons contesting.
"We are confident we have sufficient defenses to foreclosure," said Richard Cannon, adding "we are not deadbeats."
According to the complaint, the FDIC, BMO Harris and Bayview subsequently conspired with the Forest Preserve District, which "surreptitiously entered into a closed-door 'executive session' illegal agreement to pay almost full face value ($14 million) for the mortgage loan agreement."
The complaint states the Forest Preserve District is not authorized to use public funds to purchase bank loans under foreclosure litigation, nor is it allowed to use taxpayer funds to pay lawyers to litigate such loans, and that doing so in a closed-door session violated Illinois' Open Meeting Act.
Cook County Forest Preserve spokesman Don Parker said the agency did nothing wrong and that it bought the property to protect it from development.
Cannon also questions why the Forest Preserve District paid $14 million for property he said by then had been appraised at $7 million. Assuming the foreclosure is successful, Cannon hypothesized, the district would have the option of bidding on it at auction and likely pay considerably less.
"No one is going to bid $14 million if (the land) is valued at $7 million," Cannon said.
Cannon's lawsuit acknowledges that the Forest Preserve District has the power to acquire lands by gift, grant, legacy, purchase or condemnation but claims that is not the case in this instance. Rather, the district acquired "financial instruments" in a contested matter, the complaint argues.
"In effect, the Forest Preserve District used public taxpayer funds to 'buy into' a highly contentious lawsuit, without obtaining any 'lands' or real estate," the complaint charges.
Parker said the board of commissioners approved the district's purchase of BMO's interest in the property in July. The district and BMO Harris obtained a judgment of foreclosure and sale of the Barrington Hills property on Aug. 30, after a Cook County judge found the Cannons indebted to the Forest Preserve District and other plaintiffs for an amount in excess of $20 million, Parker said in a prepared statement.
"The Forest Preserves' goal is to preserve this land for the benefit of all Cook County residents," Parker said. "By waiting longer to purchase the property, we risked it being developed by another buyer ... It's a crucial opportunity that we can't pass up."
Cannon continues to reside on and manage the property which he and his wife intend to maintain "in its natural state," except for one of the buildings which they intend to turn into their dream home.
Cannon says he and his wife are in this for the long haul.
"The ranch is my home," he said.