Bank Sues Scranton, Parking Authority And Receiver Over Loan Default

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Landmark Community Bank on Friday sued Scranton, its parking authority and the authority’s court-appointed receiver over a $2.6 million loan default.

Landmark loaned the Scranton Parking Authority $2.9 million in September 2011, but the SPA has not paid on the loan since the authority was stripped last year of most of its functions, funding and power.

The lawsuit was not unexpected because Landmark’s attorney, Robert Gownley, last year threatened to sue if Scranton City Council terminated a 1995 cooperation agreement between the city and SPA that was used as the basis for collateral and security of the 2011 loan.  The Landmark loan was secured by the 10 percent of parking meter revenue that SPA receives under the 1995 cooperation agreement.

The lawsuit claims that city administration solicitor Paul Kelly, who at the time the loan was made in 2011 was solicitor for both the city and SPA, had told Landmark that the city could not unilaterally cancel the cooperation agreement between the city and authority.

Read more:  http://thetimes-tribune.com/news/bank-sues-scranton-parking-authority-and-receiver-over-loan-default-1.1442049

Scranton Embroiled In Dispute Over Another Short-Term Loan

Facing yet another cash-flow crisis, Scranton is trying to borrow a $2.75 million tax-anticipation note to pay routine daily bills and payroll.

The city administration has been negotiating with Landmark Community Bank for the TAN, but city council has balked at the bank’s demand that, in exchange for a TAN, the city must back an unsecured $2.95 million loan that the bank gave to the Scranton Parking Authority last year, council members said at Thursday’s meeting.

TANs are fairly routine, short-term loans that municipalities borrow to cover cash-flow gaps until tax revenues come in. However, the TAN dust-up is another example of how little is routine when it comes to the city’s long-standing fiscal challenges and divisions between the administration and council.

City held hostage?

Read more: http://thetimes-tribune.com/news/scranton-embroiled-in-dispute-over-another-short-term-loan-1.1293590#ixzz1qqTjMwfK