Namvar Taghipour, Danesh Rahemi, and Edgar Jerez formed a limited liability company to purchase and develop a parcel of real estate. The LLC’s articles of organization designated Jerez as the LLC’s manager. In addition, the written operating agreement among the members of the LLC provided, “No loans may be contracted on behalf of the [LLC] … unless authorized by a resolution of the members.” On the next day, the LLC acquired the intended real estate.

Two years later, Jerez, without the knowledge or consent of the LLC’s other members, entered into a loan agreement on behalf of the LLC with Mount Olympus. According to the loan agreement, Mount Olympus lent the LLC $25,000, and as security for the loan, Jerez executed and delivered a trust deed on the LLC’s real estate. Mount Olympus then disbursed $20,000 to Jerez and retained the $5,000 balance to cover various fees.

In making the loan, Mount Olympus did not investigate Jerez’s authority to enter into the loan agreement beyond determining that Jerez was the manager of the LLC. Jerez absconded with the

$20,000. The LLC never made payments on the loan, since it was unaware of the loan. Mount Olympus then foreclosed on the LLC’s property, giving notice of the default and pending foreclosure sale to only Jerez. Explain whether the foreclosure was valid.