Report: U.S. Bank Ensnared in Florida Bankruptcy Dispute
A Miami businessman has won a $6.1 million jury award after the jury determined that Minneapolis-based U.S. Bank and its equipment finance arm acted in bad faith by pushing him into involuntary bankruptcy, according to a Star Tribune report.
The verdicts, filed in U.S. District Court in Miami, include $5 million in punitive damages and $1.1 million for such things as emotional distress. Lawyers for the businessman, Maury Rosenberg, reportedly claim the punitive damages are the largest in history for such a case.
Rosenberg and his lawyers say that U.S. Bank is using involuntary bankruptcy as a collection tool, which is prohibited by federal law. They also say that the bank’s refusal to settle the dispute, even after the bankruptcy petitions were thrown out and the bank lost two appeals, has ruined Rosenberg, who told the Star Tribune that being forced into bankruptcy triggered other defaults, caused him to lose financing, and made him have to sell most of his family’s investment assets.
“These collection techniques are better related to the mob than to the fifth- or sixth-largest bank in the country,” he reportedly told the Minneapolis newspaper.
The bank, meanwhile, claims it hasn’t done anything wrong and is appropriately pursuing a litigious businessman who owes money. U.S. Bank spokesman Tom Joyce told the Star Tribune that the bank’s equipment finance group has only had one other client end up in involuntary bankruptcy since 2006.
“We respectfully disagree with the jury’s verdict,” Joyce reportedly said. “Regardless of the amount, we believe the award is not supported by the evidence, nor do we believe there is any basis for any punitive damages.”
U.S. Bank plans to file post-trial motions and is evaluating a possible appeal.
At the same time, the bank’s equipment finance group is pursuing Rosenberg for breach of contract in U.S. District Court in Pennsylvania, claiming that he still owes $4.9 million on a personal guaranty.
“Rosenberg is a savvy and experienced businessperson who signed a personal guaranty—a guaranty on which he has yet to pay a penny on,” Joyce reportedly told the Star Tribune. “We are confident we will be successful in our efforts to enforce his personal guaranty.”
Rosenberg’s company, National Medical Imaging, once owned and operated 23 outpatient centers equipped with diagnostic equipment, and annual sales were as high as $72 million. He ultimately had to close it.
To read more in the Star Tribune about the legal battle and a detailed history of Rosenberg’s relationship with U.S. Bank, click here.