The CEO of defunct local mortgage company Live Well Financial is fighting back against a multimillion-dollar lawsuit, arguing he’s not personally on the hook for debt his firm owes to a Michigan-based bank.

Michael Hild, in calling for dismissal of the case filed against him May 22 by Flagstar Bank, says he owes no money to the bank, which claims he personally guaranteed two loans that funneled more than $100 million to Live Well.

The first was a so-called mortgage warehousing loan and line of credit the bank issued to Live Well in November 2016 for $30 million. Flagstar claimed in May that Live Well owed about $13 million in principal on that note.

However, Hild, who founded the once fast-growing Chesterfield-based reverse mortgage company in 2005, claims that mortgage warehousing loan was paid off in full by Live Well as of June 10. That alleged payoff came after Flagstar filed its complaint May 22 and the same day Flagstar and two other creditors filed a petition to force Live Well into Chapter 7 bankruptcy liquidation.

The second loan from Flagstar was a bond-secured credit line from March 2017 that had an initial borrowing limit of $50 million, which then was raised to $70 million.

The bank argues Hild’s personal guarantee applies to that note as well, and about $69 million is still owed.

While Hild admits he guaranteed payment of the first mortgage warehouse loan, he denies he personally guaranteed the bond-secured loan. He argues that representatives of Live Well informed him that he was not required to personally guarantee the bond-secured agreement and that he “relied upon that representation.”

He adds that not even the bank intended him to personally guarantee that second loan.

“Hild affirmatively states that the guaranty does not, and was never meant to, guarantee the amounts due,” under the bond-secured loan agreement,” his response states. “Hild affirmatively states that all Live Well’s obligations that Hild guaranteed have been paid off.”

Hild filed his answer to the suit in federal court in Michigan on Wednesday.

Hild has not responded to requests for comments from BizSense in recent weeks. He is represented in the Flagstar case by attorney Vernon Inge from the Richmond office Whiteford Taylor & Preston. Inge declined to comment.

While Live Well also is named as a defendant in the case, its part in the suit has been frozen due to the pending involuntary bankruptcy case.

Live Well abruptly ceased operations in early May with little notice to employees and creditors.

The company has given scant explanation as to the cause of its apparently sudden collapse, stating only that “due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral or certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company.”

Flagstar and its fellow creditors have argued that Live Well has been difficult to deal with and largely unresponsive as they’ve searched for answers and information and that an accelerated process for pushing into bankruptcy is necessary to preserve the company’s remaining assets.

They also alleged that it is under investigation by the Securities and Exchange Commission and the FBI and that Hild has retained criminal counsel.

Live Well admits that it is being investigated by the SEC and that the inquiry is related to its bond portfolio operations. The company has not confirmed the alleged FBI inquiry.

Live Well, meanwhile, has argued that an accelerated timeline toward potential bankruptcy isn’t necessary and said it wants more time – the usual 21 days – to respond to the involuntary petition, after which it will determine if the involuntary process is necessary or to potentially commence its own voluntary Chapter 11 reorganization.

The company said it has been working “expeditiously” to liquidate its assets, such as mortgage loans and mortgage servicing rights.