Businessman Jeff Guinn and associates are suing Community Bank, claiming the bank unfairly cut off funding of a $29 million loan for Coronado Canyons, a 10-acre shopping center in Henderson.
The lawsuit accuses the bank of breaking a construction loan agreement, breach of a contract relating to money for tenant improvements, fraudulent misrepresentation and other civil violations.
The lawsuit, filed by attorneys Dennis Kennedy and Kimberly McGhee on April 9, urged the judge to rescind the loans and the loan guarantees and for a judgment for damages.
Calls to bank executives were not returned Friday.
The lawsuit said that Guinn spoke with Lawrence Scott, chief executive officer of the bank, in October 2007, seeking a construction loan for the Coronado Canyons, which included five buildings at Green Valley Parkway and Horizon Ridge in Henderson. The developer had started construction and was having difficulty getting loans from another lender.
The following month, the bank agreed to lend $29 million to Coronado Canyons with the understanding the bank would provide financing for tenant improvements, the lawsuit said.
In March 2008, Scott advised Guinn that McCormick Investments, developer of a high-density residential and commercial project at Fort Apache Road and Warm Springs Road, couldn’t make an interest payment on a $31 million bank loan, according to the lawsuit.
Aspen Financial Services, a hard-money lending firm owned by Guinn, had a loan subordinated to the bank loan, according to the court papers. Scott asked Guinn if Aspen would increase its loan by $1 million so that McCormick could keep the bank loan current, according to the lawsuit.
Scott said the bank did not want to report the McCormick loan as delinquent in a quarterly financial report, the court document states. Aspen Financial lenders on the hard-money loan later agreed, according to the lawsuit.
However, the lawsuit discusses failed efforts to obtain loan funds for tenant improvements.
Last October, Coronado Canyons held its grand opening and obtained statements from potential tenants interested in renting space in the project. The lawsuit says that Coronado Canyons showed the bank letters of intent from prospective tenants, including Scandals, Martin & Melissa Sosin, Edward DiBiase, Sunset & Vines, Little Divas and Tomatoes.
Three months ago, the bank argued that the developer was required to pay for tenant improvements with developer money, according to the lawsuit.
The bank now claims that interest payments on Coronado Canyons became delinquent March 1, according to the lawsuit. Early this month, the bank notified Coronado Canyons that a line of credit was in default, which the borrowers denied, according to the lawsuit.
In a separate and unrelated lawsuit, Donna Ruthe, Frank Granieri, Richard Acovino and others sued Guinn and Aspen, claiming his company mismanaged short-term loans in which they invested.
Aspen, like other hard-money lenders, solicits money from investors and uses the funds to make loans to developers who pledge real estate as collateral. Guinn is the son of former Nevada Gov. Kenny Guinn, but his father is not a defendant in the lawsuit.
The lawsuit accuses Aspen of breaching its fiduciary duties to the plaintiffs. The plaintiffs are asking for a court-ordered accounting of Aspen records and for the company to be put in receivership. An exhibit lists 27 loans totaling more than $100 million.
“We’re going to defend ourselves,” Jeff Guinn said. “The lawsuit is completely without merit. The real estate market in this town is a complete chaos. It’s affecting everybody, not just hard-money lenders.”
Attorney Mark Solomon filed the lawsuit in Clark County District Court on Tuesday.
Contact reporter John G. Edwards at firstname.lastname@example.org or 702-383-0420.