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Developers sue CU for failed condo project
DAVENPORT, Iowa (9/30/09)--Two property developers are suing a Moline, Ill.-based credit union for up to $16 million in damages on behalf of a failed condominium complex, according to opening statements in Scott County District Court in Iowa. IH Mississippi Valley CU is the target of a suit filed by Cypress Point Developments, which claims the credit union wanted out of a $3.5 million loan to develop a condominium complex in Davenport, Iowa. The developers, Niky and Thomas Bowles, seek damages of $16 million--the amount that they thought they would make from the project (Quad City Times Sept. 29). The Bowleses claim the credit union wanted to get rid of the loan because it had locked in a lower interest rates for them than it would have received from other borrowers. The developers also said the credit union had gone over its regulatory lending limits, the newspaper said. The credit union had not exceeded its lending cap, according to a 5300 call report from the National Credit Union Administration. Credit unions granting member business loans are not allowed to lend out more than 12.25% of their assets. Jon Fox, the credit union’s attorney, said when IH Mississippi Valley CU decided not to extend the loan and file for foreclosure, the Bowleses began blaming the credit union for the failed project. The Bowleses want to be bailed out from their own mistakes, Fox said. News Now contacted the credit union, but a spokesperson said it did not wish to comment due to the ongoing litigation. The trial could last through next week, the newspaper said. The condominium complex and the land on which it is located have been involved in at least six lawsuits. Several contractors have won suits against the Bowleses for unpaid work and contract disputes (Quad City Times March 18, 2008). The Bowleses announced plans for the condo development in 2003. Niky Bowles said the development would have 168 townhouses in 14 buildings, with the units priced below $90,000. One building was constructed, with four of the 12 units sold. The condos have sold for prices ranging from $186,700 to $219,770, the Times said.


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