Tom Graves says bank broke promise; hearing set

Tom Graves says bank broke promise; hearing set

July 18th, 2011 by Andy Johns in News

U.S. Rep. Tom Graves.

U.S. Rep. Tom Graves.

CALHOUN, Ga. - U.S. Rep. Tom Graves filed an affidavit Thursday reiterating that he was wronged by the bank that is suing him and a state lawmaker over a failed hotel in Gordon County.

In nearly identical six-page documents, Graves, R-Ga., and state Senate Majority Leader Chip Rogers, R-Woodstock, claimed Bartow County Bank changed the terms of the loan the two used to open Tich Hospitality and the Oglethorpe Inn in Calhoun. The documents say the bank then declared the company and the lawmakers in default.

Other recently filed court documents indicate Graves and Rogers used money the Georgia Department of Transportation gave them after condemning part of the property to stave off the bank.

Graves declined to comment, with a spokesperson saying the congressman stood by his previous statement.

Earlier, Graves said, "We remain committed to working out a positive solution for all parties involved, and since this process is pending, we are still unable to discuss any details."

The suit, filed in January 2010, alleges that Graves' and Rogers' motel and hospitality company defaulted on a loan for $2.25 million. The two filed a counterclaim in March 2010 stating that the bank had allowed Tich Hospitality to refinance the loan in November 2009, but then went back on its word.

Documents indicate Tich Hospitality was in default from June 4, 2009, until the bank formally declared default that December.

In the recent legal filings, Bartow County Bank's attorney has said the default claim was based on Graves and Rogers selling the company without telling the lender.

The attorney representing Graves and Rogers has portrayed the two lawmakers as entrepreneurs who were victims of the economic downturn and a deceptive bank.

"This case is the quintessential example of a borrower's good intentions being completely thwarted by forces beyond its control," wrote Simon Bloom, Graves' attorney, in a June 8 filing. "Defendants wanted a simple loan that would allow them to purchase and renovate hotel in Calhoun, Georgia. What they got was a broken promise from Bartow County Bank."

Edward Hine represents Hamilton State Bank, which took over Bartow Bank's accounts when the Cartersville lender collapsed earlier this year. He declined to comment on the case, but has filed a motion for a summary judgment hearing on Aug. 11.

"I think it speaks for itself," he said.

The more than 200 pages filed on the case in the last three months shed some light on what went wrong between the bank and the owners of the troubled hotel.

In July 2009, a month after the bank says they defaulted on payments, Graves and Rogers approached the bank about using money they were going to get from the state Department of Transportation to put the payments on hold. The DOT was taking part of the property and was set to pay $121,000 as compensation. Of that, $110,000 went to the Bartow Bank and the loan, according to documents.

The documents include emails from Graves in which, as late as Oct. 2, 2009, he remained hopeful he and Rogers could turn the sinking ship around. In an email sent on that date, he asked the bank to waive late fees from earlier that year and restructure the loan agreement with a $4,000 per month interest-only payment for a year.

"We have seen a dramatic improvement in our occupancy," Graves wrote. "We feel that with this improvement, coupled with the above proposals, Tich Hospitality will be well positioned to overcome the challenges of the current economy."