Bank Sues Cong. Candidate Over $2.3M Loan

Published May 29, 2010 at 9:18 a.m.
ATLANTA (AP) A Georgia bank has sued a Republican running for Congress and a prominent leader in the state's Senate, claiming they failed to repay a $2.3 million loan used to buy a budget motel.

A revised lawsuit filed last week by Bartow County Bank alleges that former state Rep. Tom Graves, state Senate Majority Leader Chip Rogers and two of their businesses are responsible for a loan taken out by Tich Hospitality LLC. The lawsuit lists Graves as a member of the company.

Graves is running against former state Sen. Lee Hawkins in a June 8 special election to fill the north Georgia congressional seat once held by Nathan Deal, who stepped down to run for governor.

Bank officials said in court filings that the loan is in default and that they want the defendants to pay the original balance, interest and its legal fees. It claims that Graves is insolvent and fraudulently transferred property, including his home in Ranger, in an attempt to make it more difficult for the bank to collect.

No hearings have been set in the case, although attorneys for the bank are seeking to question Graves and Rogers during a June 30 deposition.

Graves' campaign manager, Tim Baker, declined to answer questions Friday about the disputed property transfer or why the loan fell into default in the first place.

``I have filed my own claims against the plaintiff in this lawsuit because I suffered damages as a result of its broken promises to me,'' Graves said in a written statement. ``This country has a judicial system in place where business disputes like this lawsuit can be successfully and fairly resolved, and I am fully confident that a satisfactory resolution will be reached once all the facts have come to light.''

Rogers told reporters that the loan was taken to buy and renovate the Oglethorpe Inn in Calhoun and that he no longer has any ownership in the venture.

In court filings first reported by WSB-TV and The Times of Gainesville, Graves and Rogers said that Tich Hospitality first got the loan to buy real estate in Calhoun, then received several extensions before the loan was scheduled to become due. The firm said it was allowed to defer monthly interest payments it owed the bank.

Both men said the bank promised to refinance the loan at a better interest rate if they repaid the deferred interest. But when those payments were made, talks about refinancing the loan broke down, they said.

Graves has accused his political opponent Hawkins of spreading word of the lawsuit in an effort to weaken his candidacy and described it as gutter politics.

Hawkins denied publicizing the lawsuit, which he used to criticize Graves.

``It is inexcusable that Tom Graves is running to get elected to Congress and asking to manage the business of the people of the 9th District when he hasn't proven he can manage his own business,'' Hawkins said in a written statement.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

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