BALLSTON SPA – A local family has filed a counterclaim against the Saratoga Springs bank, alleging it abused a small business bailout loan provided to weather the COVID-19 crisis.

Adirondack Trust Company sued Nirmala A. Patel and her son Niral A. Patel in October to recover $ 1,979,600 in federal payroll protection program funds paid to 10 of their companies. They operate the Saratoga Springs Comfort Inn and Suites and, as franchisees, eight Golden Corral restaurants in New York and New Jersey, including those in Colony, Queensbury and Wilton.

The bank alleged that the PPP money was mixed between various accounts, including Nirmala’s personal checking account, and was not used for its intended purpose: to keep the 10 companies afloat during the COVID crisis.

Later that month, on behalf of the Patels, Albany law firm Nolan Heller Kauffman released a statement denying the allegations in Adirondack’s October 12 complaint to the State Supreme Court of Saratoga County.

Lawyer Justin Heller counterclaimed against Adirondack on Wednesday seeking the dismissal of Adirondack’s lawsuit, the $ 1,979,600 that was seized (plus interest) and damages likely to exceed 10 millions of dollars.

The counterclaim asserts as an affirmative defense that:

  • Adirondack did not identify a valid cause of action in its complaint.
  • Adirondack does not have standing to sue – the US Small Business Administration is responsible for enforcing the PPP provisions of the CARES Act.
  • Adirondack claims are excluded in part or in whole by documentary evidence; doctrine of renunciation; and the doctrine of estoppel.

The counterclaim also asserts and alleges that:

  • The Patels have been and continue to be wronged by Adirondack which wrongly put on hold on September 24 the nearly $ 2 million in proceeds from the PPP loan and other funds on deposit with Adirondack; they suffered more than $ 10 million in damages as a result.
  • The Patels have kept records to account for the income and disbursements of PPP loans from each of their companies.
  • Adirondack informed Niral Patel on September 25 that he had frozen Nirmala’s deposit account for an initial amount of $ 1.979 million, effective September 24; the bank later told Niral that it considered itself a partner to him and his mother, and was freezing the money for their protection.
  • On October 9, the Patels asked Adirondack for written notice of any suspected fraud or mismanagement of PPP funds; instead, the bank filed a complaint against them on October 16.
  • The PPP shortcomings alleged by Adirondack are unfounded because, among other reasons, COVID caused serious problems for the various companies in Patel even before the PPP loans were approved, and these problems can now not be characterized as a new development that justifies to appeal to loans.
  • Unless the Patels immediately have full access to the money they have deposited with Adirondack, their businesses will be forced to shut down for good.

Lawyers who filed Adirondack’s claim against the Patels in October did not return a request for comment on the counterclaim on Friday.

Heller and Niral Patel released a statement on Friday expanding on the counterclaim and the impact the Patels suffered in the two months following the filing of the original complaint.

“The underlying motives for Adirondack Trust Co.’s claims are all based on flawed assumptions and flawed interpretations,” Heller said. “Among many other shortcomings, the Adirondack Trust Co complaint ignores the fact that, with the exception of limited payroll expenses and other permitted uses, funds have always remained on deposit with the bank. “

Niral Patel said: “This lawsuit has had an excruciating personal impact on my family and our reputation, not to mention irreparable damage to the goodwill and reputation of our business in our community. … In no way have we done what Adirondack Trust Co alleges. We value all of our business relationships with our customers and employees. We are an honest, hard-working family who were blinded by the costume while reading the newspaper. “

More from The Daily Gazette:

Categories: Business, New

Source link

About The Author

Related Posts

Leave a Reply

Your email address will not be published.