It should be no surprise by now that many businesses in Tennessee have had to confront financial difficulties in the last several years. Sometimes the financial maneuvers that business owners make come under scrutiny in the bankruptcy process, and this can lead to litigation.
A business bankruptcy case involving Regions Bank and Saddlebrook Homes in Knoxville has been settled for $200,000, according to court documents. Regions Bank filed a motion to settle the proceedings against the homebuilder during the week of Aug. 27.
The filing proposed a $200,000 settlement against Saddlebrook Homes without any discretionary costs for either side. The deal included a dismissal of state claims against Saddlebrook Properties LLC, another firm started by the company president. The motion also stated that the involved parties had expended a considerable amount of money in the legal battle, including the production and discovery of 35,000 pages of documents.
The adversary proceedings were initially launched in November 2011, with Regions filing a claim against the former president of Saddlebrook Homes. The bank claimed that the developer engaged in a series of false transactions intended to defraud creditors. The initial claim sought a judgment of nearly $4 million.
Saddlebrook Homes was a prominent firm until March 2011 when the company owner announced that he was shutting it down. Regions later foreclosed on dozens of properties associated with Saddlebrook Homes. The former owner has also revealed that he is the co-owner of Legacy Land, a company that is acquiring the foreclosed properties with the intent of building homes on them.
As this case suggests, business bankruptcy is typically a complex legal procedure. It is essential for struggling business owners in Tennessee to know about the protections offered by bankruptcy while a business restructures or sells assets.
Source: Knoxvillebiz.com, “Regions, Mohney agree to $200k judgment,” Josh Flory, Sept. 4, 2012