Scranton Times Tribune, 10/20/04
By Michael Mcnarney
MONTROSE -- A Susquehanna County jury has awarded $1.5 million to a marketing
concern that claimed its business was ruined by its then-bank, CoreStates Bank,
when the bank blocked financing the business was counting on.
CoreStates, now part of Wachovia Bank, lost a similar lawsuit with B. Levy &
Son shoe store chain in Lackawanna County last month.
The $1.5 million award, believed to be the biggest from a Susquehanna County
jury in several years, came in Montrose on Monday night after 10 days of
testimony and several hours of deliberation.
Wachovia's lawyer, Lewis R. Olshin of the Philadelphia law firm Duane Morris LLP
-- the same firm that represented the bank at the B. Levy trial -- did not
return a call seeking comment.
The business, Wilprint Marketing Consultants of Binghamton, N.Y., was a
fledgling company that imprinted hometown ads on the sides of hometown grocery
bags, attorney Matthew A. Cartwright of Wilkes-Barre said. Mr. Cartwright and
Daniel W. Munley represented Wilprint.
Wilprint had a handshake relationship with its then-bank, Commonwealth Bank of
Montrose, Mr. Cartwright said -- the same sort of relationship the Levys' lawyer
described between his client and Third National Bank & Trust Co. of
Scranton.
Wilprint's Commonwealth loan officer agreed verbally in the summer of 1995 to
loan the business about $400,000 for expansion, according to court papers.
However, Mr. Cartwright said, the loan officer later backed out and only
provided some money -- most of which repayed an earlier loan.
CoreStates by then had acquired the bank and called everything owed by Wilprint,
about $330,000 in old and new loans, due immediately in August 1996. Lacking
cash flow, Mr. Cartwright said, Wilprint went out of business.
Former banker David L. Tressler of Clarks Summit, who has reviewed the case for
Wilprint and was paid to testify on the company's behalf, ripped CoreStates in a
report used in the case.
"That CoreStates called Wilprint's loans after the representations (the
loan officer) made to the Plaintiffs for full financing of their expansion plan,
in my opinion, is simply outrageous, and unacceptable practice in any reasonable
banking institution," Mr. Tressler wrote. "Knowing full well that
pulling Wilprint's financing would kill the company, CoreStates went right ahead
and did just that."
B. LEVY CASE
In the B. Levy case in Scranton, CoreStates allegedly indicated to the Levys in
late 1995 that they should get out of the retail business if they wanted the
bank to keep financing them -- and then pulled the financing because the Levys
got out of the retail business, their attorney argued. B. Levy, lacking working
capital, collapsed into bankruptcy.
The Lackawanna County jury agreed with the Levys, finding that CoreStates had
breached its contract with the Levys, violated its fiduciary duty, fraudulently
and negligently misrepresented the facts.
The amount of damages in the Levy case will be discussed at a conference later
this year. If the parties cannot reach a settlement, another jury will decide
the damages.
Of the $1.5 million awarded to Wilprint, about $500,000 will pay off a judgment
the bank got against Wilprint for the loan and associated fees. "This is a
reaffirmation that in this day and age, a handshake is still binding," Mr.
Cartwright said.
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