Wood River, LLC v. SFA Holdings, Inc.
2025 IL App (3d) 240165-U
Ill. App. Ct.2025Background
- Wood River, LLC stepped in as plaintiff seeking to enforce a corporate guaranty executed by SFA Holdings, Inc. (formerly Saks Incorporated) for unpaid rent and operating expenses after the tenant, Bon-Ton, defaulted on the lease of a commercial property.
- The lease required nearly $1.9M annual rent through January 2024; the guaranty was executed as an “absolute and unconditional” payment guaranty.
- Following Bon-Ton's bankruptcy and lease rejection in 2018, neither Bon-Ton nor Saks made any payments under the lease or guaranty for rent due from September 2018 onward.
- The property and related claims/guaranty changed hands multiple times: from C.R. Center (original landlord), to GMAC (via deed in lieu), then to Synergy (property sale), and to Wood River (guaranty/claims assignment).
- The trial court ruled in favor of Wood River after a bench trial, awarding unpaid rent, operating expenses, and attorney fees, and applying a 9% pre-judgment interest rate. Saks appealed on assignability, damages, and interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Wood River enforce the guaranty post-assignment? | Assignment language allowed assignment to Landlord's assigns. | Only a party who is also Landlord could enforce guaranty. | Wood River could enforce the guaranty. |
| Was Saks entitled to offset property sale proceeds from damages? | No offset required; duty to mitigate does not compel property sale. | Sale proceeds should offset damages to prevent windfall. | No offset required; sale not required mitigation. |
| Was evidence sufficient to support operating expense damages? | General ledgers qualified as business records and showed expenses. | General ledgers were hearsay and unsupported. | Ledgers properly admitted and support award. |
| Was a 9% per annum pre-judgment interest proper? | Lease and statute applied the max allowable rate: 9%. | Lease and statute did not permit 9%. | 9% interest rate was proper. |
Key Cases Cited
- Du Quoin State Bank v. Daulby, 115 Ill. App. 3d 183 (Ill. App. Ct. 1983) (guarantor liability governed by contract terms)
- Southern Wine & Spirits of Illinois, Inc. v. Steiner, 2014 IL App (1st) 123435 (Ill. App. Ct. 2014) (general rule on the nonassignability of guaranties; distinguishable where the contract authorizes assignment)
- McGinley Partners, LLC v. Royalty Properties, LLC, 2018 IL App (1st) 171317 (Ill. App. Ct. 2018) (assignment enforceable when contract authorizes and obligations do not materially change)
- Santorini Cab Corp. v. Banco Popular North America, 2013 IL App (1st) 122070 (Ill. App. Ct. 2013) (damages for breach aim to place plaintiff in position as if contract performed)