Leaders of the Summit View senior living community went to court Tuesday to fight a scheduled public auction and foreclosure of their property.
They argued in court documents that their company has been the victim of fraudulent charges by its lenders.
“Their attempt to foreclose is to enforce the whole (loan) amount, that includes the fraud,” said Melanie Adair, president of the board of nonprofit Senior Housing Alternatives, which manages Summit View. “We have no debt except for our mortgage, and all we’ve been trying (to do) from the very beginning is to just get an accurate number to refinance our loan and keep doing our mission.”
Bernard Global Loan Investors, based in the Cayman Islands, is trying to collect more than $6 million that the lender says it is owed by Senior Housing Alternatives.
Atlanta attorney David Rabin, who is representing Bernard Global, said he does not comment on pending litigation. The lender also declined to comment through Mr. Rabin.
Representatives of Summit View, an independent and assisted living facility on Runyan Drive, were in Hamilton County Chancery Court Tuesday, arguing for temporary injunction that would avert a public auction of Summit View. The auction is scheduled for Monday.
Chancellor Frank Brown will give his opinion on the hearing at 10:30 a.m. Thursday, the secretary of the court said.
Sale of the property could cause “tremendous hardship and difficulties for the senior residents,” according to a brief filed in December 2009 by Senior Housing Alternatives with the local Chancery Court.
The facility argues in its brief that its original lender, the now-bankrupt Cumming, Ga.-based Cornerstone Ministries Investments, imposed $2.4 million in fraudulent charges on the nonprofit organization.
When Bernard Global acquired the loan, Summit View claims the lender had knowledge of those fraudulent charges but still has tried to recover the full amount, according to the brief.
WHAT’S NEXTOn Thursday, Hamilton County Chancellor Frank Brown will give an opinion on whether Senior Housing Alternatives, a nonprofit company that manages Summit View on Runyan Drive, can get an injunction to foreclosure proceedings on the independent and assisted living center. A public auction is scheduled for Monday if the court does not find in the nonprofit organization’s favor.
That issue now is being hashed out in a Georgia federal court to determine whether Summit View even is in default on the loan, Ms. Adair said. Any foreclosure proceedings before that case is settled would be premature, she said.
Leaders of Summit View said they are certain the public auction will be put off.
“Our intent is that this won’t impact the residents. We have had full disclosure, and the residents and their families are aware totally of what’s going on. This isn’t a secret, and we believe the truth will prevail,” Ms. Adair said.