The Illinois Department of Commerce and Economic Opportunity says a small corporation has failed to abide by a loan agreement and owes it more than $80,000 for money it lent to the corporation.
The IDCEO filed a lawsuit May 6 in St. Clair County Circuit Court against TKG, Patricia A. Gibson, Gibson Health Services and Gibson Health Services Contract.
The state claims it entered into a loan agreement with TKG and agreed to lend the company $200,000 under the Illinois Small Business Development Program, a program designed to help provide financing to small businesses across the state, and the Build Illinois Act.
To secure the loan agreement, TKG's president, Patricia A. Gibson, executed a promissory note in favor of the IDCEO on June 24, 1994, according to the complaint.
Upon securing the loan agreement, TKG promised to repay the state through monthly payments of $2,124.34, the suit states.
In 2001, TKG requested a loan modification, granted to it on Dec. 20, 2001, which extended the loan for an additional five years, the complaint says.
Through June 25, 2003, TKG remitted regular monthly loan payments of $1,023.18 per month, but discontinued its payments in July 2003, the suit claims.
"TKG defaulted on the Loan by breaching several covenants in the Loan Agreement, including paragraph 5.3(C) which required TKG to remit financial statements, 5.4 which required TKG to preserve its corporate status, and by failing to remit timely monthly payments pursuant to the promissory note, as amended," the suit states.
On Oct. 9, 2007, the Illinois Department of Commerce and Economic Opportunity sent a letter to TKG notifying the company that its account was delinquent and letting it know that if it failed to pay the $73,117.38 owed by Oct. 24, 2007, it would be held in default, according to the complaint.
However, TKG failed to respond to the request and now owes $80,817.35, which includes principal of $59,426.31 and interest of $21,391.04, the complaint says.
In addition to the money the Illinois Department of Commerce and Economic Opportunity says TKG owes it, it seeks interest at 5 percent or $8.25 per day, statutory interest of nine percent per year, costs and other relief the court deems just.
Thomas C. Soraghan, assistant to Attorney General Lisa Madigan, in Belleville and John Heidinger, assistant to Attorney General Lisa Madigan, in Springfield will be representing TKG.
St. Clair County Circuit Court case number: 10-L-229.