Personal Guarantee Hit in Chicago Commercial Foreclosure
The bank is seeking $2.9 million from an investor following a $9 million loan default on a River North property.
Updated on Oct. 29, 2026 in Commercial
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Old Second National Bank has filed a foreclosure lawsuit against a River North commercial building located at 400 North State Street. The filing follows an alleged default on a $9 million loan, with the lender seeking $2.9 million under a personal guarantee.
Why it matters
The lawsuit highlights the financial pressures facing commercial property owners in Chicago as lenders increasingly act to recover debts tied to high-value real estate. This situation underscores the potential personal financial liability for investors who sign guarantees on commercial loans.
The bank is pursuing a total of $9 million in debt from the property owner following an alleged default. Included in this claim is a $2.9 million personal guarantee signed by investor Marc Bushala.
The players
Old Second National Bank
An Aurora-based financial institution that provides commercial real estate lending to business clients.
Marc Bushala
An investor who signed a personal guarantee for a portion of the loan debt through Phoenix Group Management.
The details
The foreclosure action initiated by Old Second National Bank targets a retail building that recently received a permit for restaurant conversion. The legal complaint names Great Street LLC and other entities, citing an unpaid loan balance that reached $9 million as of October 21. Through personal guarantee agreements, such legal actions can transition from corporate liability to the personal finances of individual investors.
Timeline
The building was last renovated in the 1980s.
The debt owed on the loan reached approximately $9 million on October 21, 2026.
The foreclosure complaint was filed on Monday, October 26, 2026.
Money Landscape
This development reflects the broader trend of commercial real estate loan defaults currently impacting urban business districts. It highlights the continued strain on property owners managing debt service requirements in the current economic cycle.
Commercial real estate investors should review personal guarantee clauses in their loan documents to understand their specific financial exposure. Investors facing similar delinquency issues should consult with a financial or legal professional to explore debt restructuring options.
The takeaway
Commercial lending disputes can place individual assets at risk if personal guarantees are involved in the financing structure. Owners should review their loan covenants and ensure they have a clear understanding of the implications of default on their personal net worth.
Further reading
For broader context on local market trends, visit Commercial.
Source note: This article includes information reported by The Real Deal New York.
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