The federal government last week sued a local small business investment company after it failed to repay loans issued under the Small Business Act.
Commerce Capital LP was issued Small Business Investment Company status in 1996 — with backing from the Tennessee Valley Authority and what was then Columbia/HCA — and received about $9 million in seven loans from the Small Business Administration. Those loans were never repaid, the government claims.
Commerce Capital's managers, which include former First American Bank CEO Andy Higgins and Rudy Ruark, were warned in 2007 that they were in default, but they didn't make the government whole.
The lawsuit, filed in the U.S. District Court of Middle Tennessee, asks for $11.1 million in principal and interest. The suit includes a request for injunctive relief to prevent Commerce Capital from making any disbursements of funds. The court could also issue any order stripping Commerce Capital of its SBIC status.
Efforts to reach Commerce Capital’s downtown Nashville office were unsuccessful.