By Braden Lammers – Reporter, Louisville Business First
Nov 10, 2014, 5:19pm EST Updated Nov 11, 2014, 7:38am EST
The meter is running on a legal judgment made in Jefferson Circuit Court more than a year ago.
The case involves developer J. Scott Hagan and his former plan to build Signature Point, a complex of 414 apartments and 299 condominiums on 90 acres near Christian Academy of Louisville, as Business First reported last year.
PBI Bank lent Hagan more than $25 million to build the complex, but the project went awry in the recession.
According to court records, Hagan claimed PBI Bank asked him to deed the property to the bank in exchange for forgiving the loan. Hagan agreed, if he could keep the 30 acres planned for apartments.
Hagan claims that, unbeknownst to him, PBI Bank was negotiating the sale of the apartment property to Managed Assets of Kentucky LLC for $3.8 million. Hagan’s attorneys said that was “deceitful negotiating” to secure the deed from Hagan.
In September 2013, a jury awarded $7.8 million in damages to Signature Point LLC. PBI Bank’s parent PBI Bancorp Inc., (NASDAQ: PBIB) continues to appeal that judgment.
Because the ruling favored Signature Point, PBI was required to put up a bond to cover the $7.8 million award. That appeal is ongoing, and the interest on the bond continues to accrue more than a year after the ruling and dollar amount were initially set.
“After a year with all the post-trial motions that PBI made, the case wasn’t finished in August,” Signature Point attorney Larry Zielke said.
Therefore, Zielke requested that another year’s interest be added to the bond to cover the interest that had accrued.
According to court records, the court agreed to increase the bond by $942,824 as of Oct. 1. PBI paid the additional interest to Jefferson Circuit Court on Oct. 22.
Zielke said he expects that the earliest the appeal could be resolved is the summer of 2015. If the case continues until September 2015, he said, he will ask again for the bond to be raised to cover the accrued interest.
PBI Bancorp officials declined to comment on the matter, except to confirm that the bank had made the interest payment to the court.