Developer Sues Citizens Bank for $8 Billion
(CN) - A Philadelphia developer demands $8 billion from the Citizens Bank of Pennsylvania, claiming the bank used sham accusations of default to recall loans in an effort to prop up its failing parent companies, Citizens Financial Group and "its ultimate parent, The Royal Bank of Scotland Group."
Brian O'Neill and a dozen limited partnerships did not name the Royal Bank of Scotland as a defendant; they sued only Citizens Bank and Citizens Financial Group in the Philadelphia County Court of Common Pleas.
O'Neill claims the Citizens Financial Group directed its bank to defraud and mislead him, and to renege on financial commitments to his development company after the bank started to collapse in late 2008 under the weight of billions of dollars of soured investments and a liquidity crisis.
He seeks $4 billion in compensatory and $4 billion in punitive damages.
O'Neill claims the Citizens Bank of Pennsylvania targeted and successfully solicited his business as it tried to gain a foothold in the Philadelphia region. Over time, it became one of his prime lenders, providing more than $180 million in commercial real estate financing.
But when its parents got it trouble, O'Neill says, the bank sought to recall the loans - even those that were far from coming due. So the bank made up sham and fabricated confessions of judgment, according to the complaint.
O'Neill said the bank's wrongdoing has jeopardized the $700 million Worthington Project, a reclamation and conversion of the abandoned Worthington Steel plant that was on track to be Pennsylvania's largest private investment mixed-use project.
The project was to include 106 acres of mixed-use housing, retail, hotel, office and green space in Malvern, Penn., and was projected to create over 14,000 jobs.
In addition, the bank threatened other projects, identified as the Horizon and Sayreville projects in the complaint.
Plaintiffs include O'Neill Properties Group LP, Malvern Hill Associates LP, Chester Interchange Associates LP, Horizon Lot 2 Associates LP, and Sayreville Seaport Associates LP
They accuse of Citizens Bank of Pennsylvania of fraud, conspiracy, negligent misrepresentations that interfered with existing and prospective business relations, breach of contract, breach of fiduciary duties, defamation and commercial disparagement.
The plaintiffs are represented by Steven Coren with Kaufman, Coren & Ress.