In what is certain to cause him election year migraines, the Bank of America has filed suit against Missouri Rep. Emanuel *Spittlegate* Cleaver, seeking repayment of $1.5 million from Cleaver, his wife and The Cleaver Company for a 20 year loan that originated in 2002 at a 6.25% interest rate. Cleaver has received three (3) forbearances over the ten year period.
Jacob Turk, Cleaver’s opponent in the District 5 2012 House race, noted on his Facebook page, today, that Cleaver voted on September 23, 2010 for H.R. 5297 which ‘increases the government guarantees on SBA 7(a) loans from 75 percent to 90 percent’, in essence, putting taxpayers on the hook for his bad debt.
The Kansas City Star reports:
The bank that loaned the Kansas City congressman and his wife $1.3 million in 2002 to buy the Grandview Auto Wash at 12204 Blue Ridge Extension is now demanding payment of more than $1.5 million, after the Cleavers repeatedly fell behind on repaying the loan.
The suit, filed last week in Jackson County Circuit Court, said the demand for repayment came after three attempts to delay foreclosure. Bank of America also is seeking attorney’s fees and a receiver to protect collateral.
“The Cleaver Company failed and refused, and continues to fail and refuse, to pay the outstanding obligations due and owing … under the note and other loan documents,” the lawsuit said.
In an email statement, Cleaver said, “This is a business dispute. The business has been run by an outside manager for years.” He said because it was a legal matter, he would have no further comment.
According to court documents, the outstanding principal totals $1.2 million with interest totaling $240,545 as of March 6. Late fees have reached $54,587. Both Cleavers had personally guaranteed the debts, according to the suit.
The loan was originally part of a Small Business Administration program. It was not clear Thursday how much money, if any, taxpayers will have to provide if the loan defaults.
The Bank of America lawsuit documents are here.
Here’s Jacob Turk’s entire statement from his Facebook Page:
“I am saddened anytime a business fails, because I know from my experience how hard they are to own. But for Emanuel Cleaver to borrow $1.3 million from a lender, backed by a guarantee from U.S. taxpayers, and fail to pay that debt is unconscionable. How much of this money did Cleaver or his wife personally receive?Cleaver voted on September 23, 2010 for H.R. 5297 which ‘increases the government guarantees on SBA 7(a) loans from 75 percent to 90 percent’. Are we to pay 90% of Cleaver’s bad loan debt?”