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