Georgia: McKenzie ordered to pay millions to settle debt

A Georgia federal court has ordered that area businessman Steve A. “Toby” McKenzie and other business partners named in a lawsuit must make good promptly on about $11.5 million in lease payments they defaulted on almost a year ago.

In granting summary judgment, a federal judge suggested that a company based in Columbus, Ga., that had leased millions of dollars’ worth of industrial equipment to one of Mr. McKenzie’s companies was justified in doubting the defendants ever would submit the payments they owe.

“Given the substantial sums owed under the contracts in this case and the Defendants’ spotty payment history, (Columbus Bank and Trust Co.) certainly has reason to doubt the long-term solvency of Defendants,” stated the order, filed in U.S. District Court in Columbus.

A “summary judgment” typically is granted when the material facts of a case legally cannot be disputed. According to court documents, Mr. McKenzie himself agreed that his company, McKenzie Trucking and Leasing LLC, “was obligated to pay the plaintiff under the terms of the contract.”

A woman answering the phone Monday at Mr. McKenzie’s office in Cleveland, Tenn., declined to pass on messages seeking comment to the businessman. His Chattanooga attorneys did not answer calls Monday seeking comment.

The case is one of several current lawsuits filed against the millionaire businessman, who is from Cleveland and made his fortune in check cashing, among other businesses. He also is known for donating money with his then-wife Brenda to help complete the construction of McKenzie Arena on the University of Tennessee at Chattanooga campus.

Community Trust and Banking Co. of Ooltewah has two cases against Mr. McKenzie claiming failure to pay off loans.

In the first, the bank snagged summary judgment against Mr. McKenzie and co-defendant Lynn Jones in mid-October for a 2006 loan in the amount of $6.5 million that they never repaid. Mr. McKenzie again did not deny he owed the money, according to court documents, but he disputed the allegation that he owed interest, late charges and an appraisal fee.

A Hamilton County judge, however, ordered that they repay the loan immediately, plus about $408,000 in interest and other fees associated with the case.

The second case is set for a hearing in December in which the bank seeks a default judgment. The bank claims it loaned Mr. McKenzie about $1 million in 2005 to purchase real estate for business purposes, but that the businessman has “refused” to pay back the money as of July of this year. Mr. McKenzie denies the bank’s claim, according to court documents.

Another lawsuit filed over the summer by Chattanooga’s Capital Mark Bank and Trust claims Mr. McKenzie and a company called Fairways at Mountain View LLC owe the bank $575,000 plus interest for a 2006 loan that never was repaid. Mr. McKenzie has not yet filed a response to that allegation, records show.