Bankruptcy Leaves CU Short On BusinessLoan

Register now

BANGOR, Me. - (03/09/05) -- Katahdin FCU has agreed to acceptless than a third of the $3.2 million it is owed by Inexcon Maine,the parent of bankrupt Great Northern Paper Inc., as part of thesettlement of a lawsuit. The settlement comes as part of a suitbrought by Great Northern's major creditor, Boeing Capital Corp.,which claimed the credit union should never have lent the moneybecause the business loan was secured by fraudulent real estatedeeds. Under the deal, Katahdin FCU will receive $500,000 plus twoproperties valued at $170,000, and the proceeds from the cutting oftimberlands once owned by Great Northern for eightyears.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER