Citigroup Gets Theirs; I’m Stunned
In a ruling that absolutely stunned me, a judge here in the Syracuse area has decided that Citigroup overstepped its bounds and ordered that they on a loan that they previously agreed on for the Destiny USA mall project.
In essence, what he got them on is what they’ve been doing to many of their credit card holders, basically trying to look ahead and determine that the person they were extending credit to suddenly wasn’t worthy, but instead of just trying to jack up the rates they determined they had a right to void the contract from this point on.
The judge, Justice John Cherudolo, wrote a 39 page ruling, siding with developer Robert Congel on almost every point. Citigroup said they didn’t feel that Destiny would be able to fulfill its promises, but the judge said Citigroup based its arguments on numbers that have nothing to do with requirements of the loan deal. He added that no signed leases were required by the bank, in the deal, for another six months, something the bank relied on as its proof that Destiny wouldn’t survive, and that, in the face of irreparable damage for Destiny and the local economy from a shutdown of the project, the only clear remedy was to order Citigroup to pay the money that was due under the loan agreement. He ordered the bank to continue to make the loan advances still due this year.
Locally, many of us have always worried about Congel and this project. Suffice it to say he doesn’t have the most stellar of reputations around here for paying those he contracts with to do the work. Even here, those contractors are owed $20 million, as they all stopped working once word of Citigroup’s cash freeze got out, but now that the money will be rolling again, that is, after Citigroup appeals, maybe those folks will get paid and they’ll all get back to work on this thing, which, as it stands now, is pretty ugly.
It’s about time someone stuck it to Citigroup for their practices, and I’m smiling because it happened in my own back yard. I wonder if these clowns are back on the NYSE yet; hmmm,…