Bank taking SIST to court: M&I says it’s owed more than $1.16M

Shawano Leader, Wisconsin/February 18, 2011

A civil suit was filed Wednesday seeking foreclosure of seven properties in Shawano owned by the R.C. Samanta Roy Institute of Science and Technology Inc. (SIST).

The suit filed by Marshall & Ilsley (M&I) Bank alleges SIST and its founder Avraham Cohen, formerly R.C. Samanta Roy, defaulted on a loan taken out in March 2008 consolidating previous commercial loans taken out since 2001.

The total amount of the 2008 loan was $992,133, according to the civil complaint, which also states Samanta Roy - as he was then known - executed a commercial guaranty taking responsibility for the debt.

With interest, bank costs and fees, the amount due was more than $1.16 million as of January 21, according to the complaint, and has continued to mount at about $245 a day since then.

The properties targeted for foreclosure in the complaint include the Midwest Gift and Fudge House at 104 Old Lake Road; the property at 143-145 South Main Street, part of which is leased by Hunan’s Chinese Restaurant; the former Ponderosa Restaurant building at 1247 East Green Bay Street, as well as an out-lot of that property; a property at 128 East Green Bay Street; and a property at 1214 East Green Bay Street.

The suit does not target any of the properties owned by SIST subsidiaries.

Also named in the suit - as defendants that may claim an interest in SIST’s assets - are several parties that have filed civil suits of their own against SIST over the last few years, including Baylake Bank of Sturgeon Bay; Zien Service Inc. of Milwaukee; Integrity First Bank of Wausau, which was recently awarded a $1.2 million judgment against SIST; Associated Bank in Green Bay; and MMG Financial Corp. of Ontario.

M&I maintains those claims are subordinate to the mortgages issued by the bank. The suit seeks to prevent those other parties from claiming any properties or assets before M&I.

SIST purchased 13 properties between 2000 and 2004. Subsequent properties have been purchased by its subsidiaries Midwest Properties, Midwest Hotels and Motels, and Midwest Oil. Combined, SIST and its subsidiaries own more than 40 properties in Wescott and the city of Shawano.

In March 2009, SIST and six of its subsidiaries filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court in Delaware. The bankruptcy was dismissed in September 2009 and is currently being appealed to the U.S. Third Circuit Court of Appeals.

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