The Heritage Bank – Defendants Agree to Consent Judgments on 100 percent of Debt

Challenge

The Heritage Bank is a state-chartered bank with offices in Southeast Georgia. The bank made loans to a partnership seeking to build subdivisions on a large tract of land in southeast Georgia. The project faltered, the borrowers were denied further loans, and they couldn’t sell the project land to repay the bank. Three individual partners were guarantors of the note. One of the partners started to convey other land he owned free and clear to companies he created so he would not lose those properties to the bank. The bank hired Arnall Golden Gregory to take legal action to recover the loan and address the fraudulent conveyances.

Approach

Arnall Golden Gregory filed one lawsuit on the debt and another to undo the property transfers made to avoid debts. The debtors claimed the bank had broken promises but had no evidence to back up those claims. AGG filed a summary judgment motion on the debt lawsuit and conducted discovery on the fraudulent transfers lawsuit. The evidence uncovered during discovery helped convince the defendants to seek a settlement.

Result

Shortly before a hearing on the cases, the defendants agreed to consent judgments on 100 percent of the debt and all attorneys’ fees – a total of about $7 million. They also agreed to pay $350,000 to let the property transfers stand, which was the plaintiff’s valuation of those properties. Once The Heritage Bank disposes of the collateral property, it’s free to pursue other assets to make itself whole.