By Kevin Eigelbach – Reporter, Louisville Business First
Nov 7, 2013, 2:44pm EST
Louisville-based PBI Bank has appealed a $7 million judgment rendered against it in Jefferson Circuit Court in a lawsuit involving Signature Point, a proposed residential development off English Station Road.
As Business First reported in July, a Jefferson Circuit Court jury awarded $7 million in damages against the bank.
The case involved 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. PBI Bank lent Hagan more than $25 million to build the complex, but the project went awry in the last recession.
According to court records, Hagan had claimed that PBI Bank asked Hagan 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.
While they were negotiating, according to a trial memorandum that Hagan’s attorney prepared, PBI was also negotiating with a third party to buy the apartment property.
“PBI concealed the sales opportunity from (Hagan) and instead began a course of deceitful negotiating with Hagan in order to obtain a deed to the property,” according to the memorandum.
Hagan eventually deeded all the property to the bank, and the bank sold the apartment property to the third party — Managed Assets of Kentucky LLC— for $3.8 million, according to the trial memorandum.
A portion of the Signature Point property now is being developed by Elite Homes Inc., which plans to build 124 garden homes and unattached single-family homes, as Business First reported in August.
According to court records, on Oct. 25, the bank appealed the jury verdict to the Kentucky Court of Appeals both the verdict and the judge’s decision to deny PBI Bank’s motion to reduce post-judgment interest the bank would have to pay.
Attorneys for the bank and for Signature Point did not immediately return messages left for comment today.