Wells Fargo wins $30 million judgment against Florida borrower
Tuesday, September 11, 2012 10:27 AM
Wells Fargo & Co. has won a $30 million judgment and the appointment of a permanent receiver in its lawsuit against prison-service provider Medical Development International Ltd. (MDI) over the repayment of loans, reports Bloomberg.
The lawsuit was filed in Delaware by against the Ponte Verdra, Fla.-based MDI over Wells Fargo's contention that the loans for executive borrowing were in default. The loans were for a working farm, a biographical screenplay about Chief Executive Officer Richard Willich and payments for a Tesla Roadster.
Wells Fargo contended that MDI was in a deteriorated financial condition and wasn't being operated in the best interests of stakeholders. MDI said Wells Fargo had "abandoned its traditional role as lender and took up the role of corporate raider" to divert company assets.
The receiver, Ronald Winters of Alvarez & Marsal Healthcare Industry Group LLC, is authorized "to do any and all acts necessary for the proper and lawful conduct" of company affairs, lawyers for both sides said in a stipulation approved Sept. 7.
Winters told Bloomberg that more than likely MDI will fold.
Wells Fargo contended that MDI was at risk of not obtaining renewal of a key contract with a North Carolina federal prison, which accounted for 35 percent of its revenue, because of the company had failed to pay approximately $8.3 million to a medical service provider.