Theater Claims Bank’s Bungling Cost it $12M

PHILADELPHIA (CN) - The Prince Music Theater clams that TD Bank's bungling cost it $12 million. The theater claims the bank mismanaged its accounts when it took control of the theater's finances for eight week after the theater reported that a bookkeeper had forged checks, and the bank had cashed them.

Among the problems are that the bank closed the theater's old accounts but wouldn't let it open new ones, according to the federal complaint.

Underlying loan agreements require that Prince do its banking with TD Bank, and the theater says it was powerless to stop the bungling bank to take complete control of its financial operations. But the theater says the bank mismanaged its accounts "with stunning incompetence, leading to chaos."

"The bank made systematic errors in overseeing the linked accounts that caused serious damages to the Prince, its board and employees, reaching a crisis when an innocent employee was wrongfully denied access to her own money and credit cards and treated like a criminal," the complaint states. "Instead of taking responsibility for its actions, the bank's attempt to cover up its mismanagement of this basic banking function grew into a series of misrepresentations and breaches of fiduciary and contractual obligations that culminated in a wrongful claim of default just twelve months later. Critically, the Prince was in fact not in default, contrary to the Bank's claim of November 11, 2008, having already paid and accrued well in excess of its loan liabilities due on that date. Nonetheless, TD Bank has used this wrongful claim of default in a relentless campaign to evade liability for its own errors, interfere with the Prince's fundraising and operations, and seize the Prince's well-located property, a community asset, for conversion to commercial use. In this Complaint, the Prince seeks to recover damages for TD Bank's wrongful, destructive, and abusive conduct."

The theater wants $12 million. It is represented by Matthew Hamermesh with Hangley Aronchick.

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