A bank has filed suit on a motel that it claims defaulted on a loan, then prevented the bank from access to collateral used to secure the loan.
Liberty Bank claims it lent defendant Royal Inn Motel $200,000 on Oct. 5, 2009. Defendant Sandeep J. Patel guaranteed repayment of the money if Royal Inn defaulted on its payments, according to the complaint filed March 19 in Madison County Circuit Court.
Until April 15, 2012, Royal Inn Motel promptly made payments, the suit states. However, the motel defaulted on its payments in April of 2012, the complaint says. Patel also failed to pay off the loan, Liberty Bank claims.
“At present, the total amount due to Liberty Bank is $165,018.05,” the suit states.
Not only has Liberty Bank been unable to secure the money from either Royal Inn or from Patel, but it has also been unable to secure the collateral for the loan.
“In early 2012, the principal structure on the real estate secured as collateral to Liberty’s loan was destroyed by fire,” the suit states.
Following the fire, Patel and Royal Inn Motel were able to get a payment from their insurance company, the complaint says. In turn, they were supposed to relinquish the money to Liberty Bank, it claims.
Although the insurance company issued a $118,000 check to both Liberty and Royal Inn, Royal Inn has refused to endorse the check. In turn, Liberty Bank has not been able to access the funds, according to the complaint.
In addition to the money it claims it is owed, Liberty Bank is seeking court costs, attorney’s fees and other relief the court deems just. It is also asking the court to order the defendant to endorse the insurance check.
The bank will be represented by James S. Sinclair of Stobbs and Sinclair in Alton.
Madison County Circuit Court case number: 13-L-458.