If you recall, I have had several posts about Brian O’Neill of O’Neill Properties in regards to his Uptown Worthington project in Malvern (future site of Wegmans). Citizens Bank had secured a $61 million judgment against O’Neill in November for unpaid loans on the project.
Breaking news . . . Mr. O’Neill is taking back the ball to his side of the court. He has filed a lawsuit against Citizens Bank for $8 billion in damages ($4 billion in compensatory damages and $4 billion in punitive damages), claiming that the bank wrongly called for loans before they were due and the bank did not follow through with their end of the agreement with construction financing.
The O’Neill lawsuit alleges that Citizens Bank judgment was “maliciously based upon sham defaults manufactured by the bank in bad faith — as part of a scheme to pressure”. I am guessing that Citizens Bank tried to back O’Neill in to a corner with their demand to repay the loans. O’Neill’s lawsuit points to a couple of major problems with Citizens Bank. First, the bank was demanding repayment on the financing loans before the loans were scheduled to be due; and secondly, Citizens induced O’Neill to amend the initial loan agreements and increase the amount borrowed when they had no intention of doing so.
After Citizens Bank secured its judgment against O’Neill (in essence leaving the Worthington project without promised financing as the lead lender), O’Neill has been challenged in his efforts to find other financing. Without Citizens Bank’s financing, O’Neill has faced great difficulty in restructuring the financing required for the Worthington project. We are acutely aware that the economic climate is far different now than it was in 2002 when Brian O’Neill and O’Neill Properties began this major redevelopment project in Malvern, making this current financial situation all the more difficult for both sides. Because of Citizens Banks actions, O’Neill alleges that he has lost not only tenants but also damages to his company far exceeding the $61 million loan amount. As a result, O’Neill is seeking damages of $8 billion from Citizens Bank.
If you are keeping score, looks like the ball is in O’Neill’s court. Citizens Bank, you are up next . . .