SBA Debt Collection
SBA debt collection litigation includes judicial and nonjudicial foreclosures, bankruptcy and lawsuits to collect on the 504 Note or Guarantees.
This is a re-post of articles about Minnesota State Senator, Sean Nienow and his wife, Cynthia, who, along with their company, National Camp Association, Inc. have been sued by the United States Department of the Treasury for approximately $748,000 in connection with an SBA loan default.
The lawsuit was filed January 17, 2014 with the U.S. District Attorney’s Office in Minneapolis for failure to make payments on a $613,000 small-business loan.
The complaint states that on January 16, 2009, the Small Business Association (SBA), through U.S. Bank, provided a loan to National Camp Association, Inc. The note was signed by Sean Nienow as the president and secretary of National Camp Association, Inc., and was personally guaranteed by the Nienows.
According to Isanti County court documents, Sean Nienow purchased the assets of National Camp Association, Inc, a New York corporation, for the amount of $699,000. He paid $621,000 on January 22, 2009, the day of closing, and promised to pay $30,000 plus accrued interest by January 16, 2011.
On October 11, 2011, Nienow and National Camp Association, Inc. were served with default and failure to make payments on any of the $30,000 or accrued interest, according to the lawsuit filed in Isanti County.
Isanti County District Judge Edward Bearse ordered Nienow to pay $7,755 to the New York company.
The business, described by various news sources as an organization helping parents find camps for their children, filed with the Minnesota Secretary of State on May 29, 2008 with Sean Nienow as its chief executive officer.
The registered office address was an unlisted address next to the Nienow’s home in Cambridge.
“There was no letter or permit application for a home occupation permit for the camp business,” said Lynda Woulfe, Cambridge city administrator. “It would have required one because they were conducting business out of the home.”
The intent of the home occupation permit is to allow limited passive commercial-type uses in a residential area to not detract from the character and integrity of residential neighborhoods. The home occupancy statute lists conditions and provisions such as utility usage not exceed that which is normally associated with the residence.
The U.S. Bank loan was guaranteed through SBA. This is usually done when the bank wants to loan the money, but the company may not have a lot of collateral, said Royce Nelligan, SBA district council. The SBA guarantee is typically 70 percent of the total loan.
The complaint states that the Nienows stopped making payments on the loan in July 2010. The principal balance is for $558,076.53. With administrative costs, attorney’s fees, and postjudgement interest, the lawsuit is asking for $747,937.62.
National Camp Association, Inc. was dissolved August 1, 2012, according to the Secretary of State’s website.
The complaint states demand for payment was made, but the defendants have not complied.
Nienow released a statement that the lawsuit is not related to any of his legislative duties. He is not taking any calls on the case.
“I have not yet received a copy of the legal filing in question,” Nienow said in his statement. “But it is clearly not related at all to any of my Minnesota Legislative duties. As with all pending actions of this sort, discussion of any details cannot take place until it is fully resolved.”
Nienow had previously served two terms, starting in 2003 and 2005, but was unseated by Rick Olseen (D-Harris). Nienow won back his seat in November 2010, and has held two additional terms, starting in 2011 and 2013. His seat is up for election in 2016.
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If you are struggling with circumstances that involve SBA loan default or DOT collection action, you deserve professional help! Our attorneys know how to settle SBA OIC and DOT compromise cases. If you contact us, we can help you settle SBA debt once and for all. After you schedule an appointment, you confer with a dedicated SBA OIC and DOT Practitioner who helps you through your administrative legal battle. After your claim is resolved, you never again have to worry about your SBA loan default or DOT collection problem haunting you. Our team of lawyers has assisted many clients through the years. Now it is your turn! You truly can settle SBA debt for good!
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
Clients personally guaranteed SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
Clients personally guaranteed an SBA 7(a) loan. The SBA referred the debt to the Department of Treasury, which was seeking payment of $487,981 from our clients. We initially filed a Cross-Servicing Dispute, which was denied. As a result, we filed an Appeals Petition with the SBA Office of Hearings and Appeals asserting legal defenses and supporting evidence uncovered during the discovery and investigation phase of our services. Ultimately, the SBA settled the debt for $25,000 - saving our clients approximately $462,981.
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