Jerguson: Loan Default Lawsuit a 'Business Dispute'
Senate District 21 candidate Sean Jerguson is a party to a case in which he and several others have allegedly defaulted on a loan totaling more than $600,000.
Georgia Senate District 21 candidate Sean Jerguson and his business partners are on the hook to repay a bank loan totaling over $600,000.
That's according to court documents filed in the U.S. District Court Northern District of Georgia.
According to a lawsuit filed in September by Arkansas-based Bank of the Ozarks, J. Cary and Kimberly H. Bullard of Gainesville, owners of Sapphire Pointe LLC, Jerguson and his wife Kate have allegedly defaulted on a $611,670.95 loan and $28,956.52 in unpaid interests they received in 2004 to operate the Maplewood Mobile Home Park in Cedartown.
The Arkansas-based bank took over the loan when the original bank failed.
The defendants, according to court documents, have all filed responses in the case denying allegations.
"It’s in litigation, so this is not something that can be discussed," he said.
Jerguson's campaign spokesperson, Robert Trim of Spitball Consulting, LLC, noted Sapphire Pointe LLC had been on time with their payments, adding that the lawsuit has basically become a “negotiation on how to extend the line of credit."
According to Jerguson's financial disclosures, he along with wife Kate, are listed as a passive investors in Sapphire Pointe.
Jerguson added he believed the dispute could be settled within the next two months.
"This does not have relevance of the state legislature," He said. "It's purely a business dispute. "If I had dome something illegal, then it would have relevance, but I haven't. It's a business dispute."
According to Atlanta Unfiltired, Sapphire Pointe also owes $6,096 in unpaid 2011 property taxes. The government also imposed over 40 liens in 2009 and 2010 for unpaid property taxes that exceed $7,000.
Atlanta Unfiltered also reported Jerguson did not include in financial disclosures real estate interests of businesses he lists as having some form of ownership in. Those properties are worth more than $1 million, according to Atlanta Unfiltered.
Those include the location of his small business Hi Caliber, for which he took advantage of a $755,000 loan backed by the Small Business Administration in Holly Springs, and the mobile home park.
Jerguson's critics characterized the candidate as a hypocrite since Propublica, an investigative journalism website, listed the loan received by Jerguson as being funded with federal stimulus dollars.
Jerguson in January 2010 took advantage of the SBA's 7(a) loan program, which has been around since the 1950s, and was awarded the funding through Cherokee Bank. The money was used to purchase the property for the shooting range and store, according to Atlanta Unfiltered.
SBA doesn't distribute loans, but backs loans made by banks.
The American Recovery and Reinvestment Act, better known as the federal stimulus program, set up a funding pool in which the SBA was able to temporarily eliminate fees for the loans it backs.
The bill also allowed the SBA to increase the portion of loans it would guarantee by up to 90 percent.
Jerguson is facing an increasingly nasty special election battle against North Fulton County Chamber of Commerce President & CEO Brandon Beach. The special election is slated for Tuesday.
Atlanta Unfiltered also published an article in which Beach failed to refund campaign contributions he received in 2010, a violation of state law. Beach instead rolled over those donations to be used in the 2012 primary race. He told the news organization that the mishap was "unintentional."