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BANKING / FINANCE : Contractor Gets $1-Million Settlement in Loan Dispute With Westlands Bank

Compiled by James S. Granelli, Times staff writer

A contractor who claimed that the old Westlands Bank in Santa Ana robbed him of his housing project by manipulating a loan arrangement in 1982 has won a $1-million settlement from the Canadian bank that later bought Westlands.

Michael H. Prodan of Sun Valley and seven investors recently received a check for $990,000 and the right to $20,000 more in an escrow account to settle the Orange County Superior Court lawsuit.

Westlands had agreed to lend Prodan $2 million to build 21 houses on a 5-acre parcel in San Dimas as long as he and the investors obtained a $200,000 letter of credit from another bank so Westlands could recover any losses it might incur.

Among a number of alleged improper actions, Westlands was accused of calling in all the funds on the letter of credit when it was entitled to only $75,000. Its actions also led to a receiver being appointed to sell the homes Prodan had built.

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“The bank didn’t care if it was entitled to the money, it just grabbed it,” said Gary E. Shoffner, an Irvine attorney for Prodan.

Westlands was bought in 1984 by a subsidiary of Canadian Commercial Bank in Edmonton and is now called Commercial Center Bank. The Canadian bank, which is being liquidated, did not admit wrongdoing in settling the case.


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