Just as it picks up $30 million in government-furnished equity capital, Franklin-based Tennessee Commerce Bank is trying to collect on almost $20 million in delinquent loans to an Oregon-based senior home chain that has already put some of its operating units into bankruptcy.
On Friday, the bank filed suit in Nashville's U.S. District Court against four affiliate companies and two senior executives of troubled Sunwest Management Inc. The lawsuit claims the borrowers are in default on three loans totaling $19.94 million.
Sunwest CEO Jon M. Harder and and chief operating officer Darryl E. Fisher are named individually in the complaint, which is viewable at this link.
The bank filed suit the same day it announced the sale of $30 million in preferred stock to the U.S. Treasury Department, a purchase funded by the $700 billion bailout bill. David W. Houston IV and Katherine K. Layhew of the local office of Burr & Forman brought the case on behalf of Tennessee Commerce.
Sunwest, based in Salem, Ore., is the fourth-largest assisted living facility operator in the U.S. Although it was still in acquisition mode as recently as May 2008, when it paid $8.25 million for an assisted-living center locally in Bellevue, it has been trying to sell off assets across the country in recent months. The operating entities for 10 of its senior homes have filed for Chapter 11 bankruptcy.
Sunwest and other assisted-living providers have seen falling demand for their facilities as the economy has worsened in recent months.
Tennessee Commerce had an allowance for loan losses of $12.2 million as of Sept. 30. Its total loan portfolio on that date was $985.6 million.
Frank Perez, CFO of the bank, told NashvillePost.com that bank policy prohibited him from commenting on specific loans or borrowers.