Siragusa, et al. v. Collazo (In re Collazo)

14 C 5008
The 7th Circuit examined the factual underpinning of the case, including the fact that the Plaintiffs had been satisfied with Collazo's evasive responses to inquiries about their investments, had taken his small partial payments, and had invested further with him after allegedly being bilked out of the initial money they lent. In the end the Appellate Court agreed with the Bankruptcy and the District Court that the burden of due diligence and timely follow up fell on the investors, especially in light of multiple warning signals. In fact, several claims were so old that they were time-barred because the Plaintiffs could have - but did not - act timely to protect their interest. AFFIRMED  IN  PART. REVERSED  AND  REMANDED  IN  PART
Procedural context:
In 2012 Collazo filed for Bankruptcy protection. All 5 Siragusas joined in an Adversary action contending that Collazo was not entitled to a discharge of debts to them. However, the Bankruptcy and District Court for the Northern District of Illinois, Eastern Division, disagreed and allowed all but one claim to be discharged. Thereafter, all but one of the Siragusas appealed to the 7th Circuit.
Arturo Collazo and partner were Chicago real estate developers who concentrated in the conversion of apartments to condominium units, which they then sold. Their business model included the use of LLC's to hold the properties. Dr. Robert Siragusa, his Employee Benefit Trust, and his 3 children had all financed properties owned and developed by Collazo, including an Arizona project.

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