ST. LOUIS (CN) - Bank of America claims in Federal Court that a Jewish Community Center is trying to force it to refinance a $45 million loan by withholding $4 million in debt payments.
"This action arises out of JCC's continuing refusal to make more than $4 million in payments currently payable under two separate agreements between the parties," the complaint states.
"Although JCC has sufficient resources and the present ability to make these payments, it has steadfastly refused to do so. The reason for this refusal is simple. JCC is withholding these payments in a calculated effort to force Bank of America either to restructure a $45 million loan to JCC on terms far more advantageous to JCC than originally negotiated, accepted, and agreed upon by the parties or to accept a substantial discount on this $45 million loan."
Bank of America claims the JCC did not repay a $2.5 million line of credit due in September 2011, and two bond redemptions from 2010 and 2011. It claims the JCC has the money, and has paid other creditors, and "is using the specter of future financial uncertainty to shirk its current obligations" to Bank of America.
"Even if JCC's capital campaign contributions, sales of properties, and operational cash flow may not have kept up with internal JCC projections, the proper response is not to simply breach its obligations to Bank of America when JCC is capable of making all current payments," the complaint states. "The fact that JCC is now unwilling to meet its obligations (despite its unquestioned present financial resources) must not be countenanced.
"Although under no obligation to do so, Bank of America has attempted on several occasions to reach an acceptable resolution of these issues with JCC, but to no avail.
Accordingly, as a result of JCC's continuing refusal to meet its contractual obligations under the parties' agreements, Bank of America seeks enforcement from this court." (Parentheses in complaint.)
The $45 million loan was used to improve the JCC's campuses in Creve Coeur and Chesterfield, both in St. Louis County, according to the complaint.
JCC President and CEO Lynn Wittels told the St. Louis Post-Dispatch that her group was blindsided by the lawsuit. She said that Bank of America had repeatedly rejected the JCC's proposals.
"What they don't say (in the complaint) is that for the last 18 months, we've been trying to work with them for a new financial arrangement," Wittels told the Post-Dispatch.