A key bank lawsuit is a legal action taken by a bank against a debtor for money owed that is held in the bank. The United States attorney general and the state attorney general filed a legal suit against a Key Bank of Maine that was holding loans in the form of overdrafts to account in their bank account. The overdrafts were held as security for the loans that were being made. When the banks became aware of the overdraft situation that they had created, they opened an investigation into how this had occurred and who had placed the funds into the bank accounts. The investigation was part of the loan modification process that all banks go through to try to avoid such things from happening to them.
The main goal of the lawsuit that was brought against the Key Bank of Maine was to try and force the bank to refund the funds that they were holding from the Maine account of the debtor. This would amount to a judgment of about eight million dollars. The money owed to the debtor was a loan that was originally stated to be for ten million. As the bank tried to make up for their mistake and try to get the debtor to pay up, the lawsuit was brought against them.
The main defendant in the Maine Key Bank lawsuit was the trustee of the account. The Maine court found that the defendant, Mr. Morris, had in fact misused his power of attorney that had been filed by his wife to set up the overdrafts. Mr. Morris had used the power of attorney to give himself authorization to allow the overdraft to go through. On the day of the signature of the power of attorney for the overdraft, the bank received a call from the trustee informing them that they could not do anything with the account. At this point Mr. Morris then transferred the ownership of the account to his wife’s name.
The United States attorney general, Thomas Lynch, had moved to intervene and was ready to file suit against Mr. Morris and the key bank. Mr. Morris and the company had gone into business together many years before this incident. Mr. Morris had informed his wife that he did not want to be bothered with his business affairs any longer and so she made the decision to change the locks at their home and sell the home. It is needless to say that the United States attorney general’s lawsuit had nothing to do with either selling or changing the locks and the case was closed.
Mr. Morris was sued because he had failed to make the payments on time to the credit companies. The main issue was that he did not have the cash on hand to make the payments to the credit companies. The boyajian accounts were unsecured creditors. These were all the very reasons that the key bank had for trying to collect these debts from the debtor. The boyajian account was also owed by the United States governments to some degree because it held funds for the national security bills that were paid out each year.
Once Mr. Morris lost his job, he immediately began making monthly payments to the key bank. The company then placed a lien against his house. At this point, the key bank’s counsel advised them of the steps that they needed to take in order to recover the money owed to them by filing a default judgment against Mr. Morris. The next step in their plans was to get a court order known as a trustee interim application filed by the trustee. This was the initial step toward getting a lawsuit started against Mr. Morris.