$4m loan becomes $1 billion lawsuit: Businessman refuses to pay
November 30, 2008
Mandeville businessman Michael Levy, who borrowed $4 million from a commercial bank in 1994, is now facing a lawsuit for $1 billion arising from the loan transaction.
The loan related to a mortgage on a 40-shop commercial complex in Mandeville, Manchester, owned by Levy.
Levy is contending that he does not owe that much, but the Jamaican Redevelopment Foundation Inc (JRF), which took over the loan from the defunct Eagle Commercial Bank, says otherwise.
already paid millions
Levy contends that he has already paid millions to service the loan, including on one occasion in 1997, a payment of about $16 million by his lawyer Anthony Pearson.
In August 2007, the JRF appointed a receiver to take charge of Levy's property, saying he owed more than $800 million on the loan.
With interest charges, the loan would now amount to about $1 billion, said Levy in court filings.
The legal battle between the JRF and Levy has extended to include Minister of Finance Audley Shaw.
On November 17, the Supreme Court granted leave for Levy to apply for judicial review to quash an order made by the minister in January 2008.
extended an exemption
The minister is purported to have extended an exemption given to the JRF in 2002 from the provisions of the Money Lending Act.
That exemption allows the bad-debt collector to apply interest of 50 per cent or more against loans.
Without the exemption, the applicable rate would have been capped at 20 per cent.
Levy says in court documents that he wrote to the minister in February this year outlining his plight, but so far, he has not received a response....
Author: Barbara Gayle
Source: Jamaica Gleaner
