Coast unit target of lender liability suit.Coast unit target of lender liability suit A local pharmaceutical manufacturer has filed a multimillion-dollar lender liability lawsuit against CoastFed Business Credit Corp. charging it and a local investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. with fraud, negligent misrepresentation misrepresentation In law, any false or misleading expression of fact, usually with the intent to deceive or defraud. It most commonly occurs in insurance and real-estate contracts. False advertising may also constitute misrepresentation. and breach of conduct. The suit, filed by Ronald Udell's C-Corp., charges when the now-bankrupt pharmaceutical supply firm was in 1988 merger talks with investment banker Bernard Mass' Whiteworth International pharmaceutical company, CoastFed officials vouched for the health of Mass' firm despite knowing Whiteworth was in dire financial straits Straits: see Dardanelles; Bosporus. . Both pharmaceutical firms are based in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . CoastFed is a wholly owned finance subsidiary of Los Angeles-based thrift holding company Coast Savings Financial Inc. Udell lead attorney A. Barry Cappello charged CoastFed officials backed Mass to protect more than $2 million in delinquent loans to Whiteworth. "CoastFed took a look at C-Corp.'s cash flow, inventory and assets and knew that after the merger, it could declare a default on its loans to Whiteworth and then liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the C-Corp.'s assets to recoup recoup To sell an asset at a price sufficient to recover the original outlay or to offset a previous loss. any losses," he said. CoastFed attorney Tom Lallas retorted, "The material allegations of the complaint are untrue. The speculations of Cappello as reflected by the press release are erroneous and unfounded and CoastFed expects to be totally vindicated in this action, which should never have been filed in the first place." The lawsuit, filed in Los Angeles County Superior Court, say Udell and Japanese C-Corp. creditor Kenko Commerce & Co. Ltd. tried to scrap the merger with Whiteworth in January 1989, four months after it took effect. CoastFed allegedly said it would cooperate with the dissolution only if Kenko paid $400,000 toward Whiteworth's debt, a request with which Kenko President Satomi Tsuchibe refused to comply. The suit seeks compensatory damages A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. of $2.2 million as well as unspecified tort damages from CoastFed, Mass and 20 other individuals. |
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