LENDER LIABILITY LAW FIRM CAPPELLO & NOËL TAKES OVER LITIGATION AGAINST IMPERIAL CAPITAL BANK
RIVERSIDE COUNTY, CALIF.— Cappello & Noël, LLP, a nationally renowned lender liability law firm, has taken over as legal counsel in a lender liability suit against Imperial Capital Bank (ICB). The suit, originally filed by RDS Villages in July 2008, involves a residential real estate development in Cathedral City, California known as Rio Del Sol (RDS Villages, LLC et. all vs. Imperial Capital, Century Vintage Homes, et. al, Superior Court of California, County of Riverside, Indio Branch, Case No. INC 079114, July 29, 2008).
The lawsuit alleges a number of predatory lending practices against ICB. They include, among other allegations, that ICB breached its contractual agreements with RDS Villages and its Owner, Damon Siskin, making it impossible for RDS to complete its development of residential homes at the Cathedral City site. The suit also alleges that ICB conspired with another entity, Century Vintage Homes, resulting in the manipulation of their financial statements affecting both their stockholders and the government regulators. “Often, difficult times bring out the worst in people. We are now dealing with the consequences,” says Siskin.
“Imperial Capital Bank changed the terms of its loan agreement with RDS without RDS’ consent,” says A. Barry Cappello, managing partner in the Santa Barbara law firm of Cappello & Noël and considered one of the pioneers of lender liability law. “ICB’s conduct made it impossible for RDS to pay off or reduce the loan amount, which stood at $16 million, by selling off portions of the property or to raise additional financing. ICB blocked RDS’ every move, we believe, in an attempt to seize the property. But for the ICB’s constant and unreasonable interference, ICB would have been able to close purchases of existing homes and construct future homes.”
ICB was recently delisted by the New York Stock Exchange for failure to maintain the stock exchange’s minimum continued listing threshold. Additionally, the Securities and Exchange Commission has opened an investigative file on ICB.
In addition to the civil litigation against ICB, Cappello & Noël also filed a complaint with the Troubled Asset Relief Program (“TARP”) regarding ICB. “A letter to TARP was sent January 15,” says Cappello. “The letter, with copies of the cross complaint, is designed to call attention to ICB’s predatory lending practices should ICB request TARP funds.”
The cross complaint seeks damages from ICB including breach of implied contractual covenant of good faith and fair dealing, breach of fiduciary duty and breach of contract. It seeks $30 million in damages.
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For a copy of cross complaint, contact Dugan Kelley, Cappello & Noël, 805-564-2444, dkelley@cappellonoel.com.
