I am a former 50% member of a dissolved limited liability corporation. Our community bank served as a business loan lender and a checking institution. The LLC obtained the first note and payments became in arrears in the two years after obtaining the first note. The bank consolidated the loan, past due payments and fees, and produced a second note. The note became quickly in arrears, and the bank attempted on several occasions to obtain automatic payments from the checking account. The checking account became nearly $9000 overdrawn, about a third of the negative balance resulting from overdraft charges and fees. The bank produced a third note in the form of an operating loan, applied it to the negative checking account and closed the account. They repossessed all business and personal property they could obtain from me and the other member. They claim an outstanding balance of $25,000 for both delinquent notes and are suing me personally for the entire balance. Is there anything fraudulent about what they've done here?
It sounds as though the business was suffering and the bank tried to create loans and a structured repayment plan that was not successful. Depending on the financials from the business, the bank may have tried to revive what was a dead business. That is not fraud. They may have dragged on the workout too long, but they were attempting to collect what was owed, and avoid a loss that would have helped the business and owners.
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It sounds as though the business was suffering and the bank tried to create loans and a structured repayment plan that was not successful. Depending on the financials from the business, the bank may have tried to revive what was a dead business. That is not fraud. They may have dragged on the workout too long, but they were attempting to collect what was owed, and avoid a loss that would have helped the business and owners.
