Paul McKee’s legal woes are growing.
PNC Bank filed a federal lawsuit late last week in the Southern District of Illinois. It claims McKee, several of his holding companies and the former Corn Belt Bank & Trust defaulted on an $8 million loan from a PNC predecessor.
The loan was for McKee’s 193-acre development Three Springs at Shiloh in St. Clair County. The planned mixed-use development was to include retail, office and residential space, much like McKee’s Winghaven in St. Charles County.
But those plans did not come to pass. In a statement, McKee's spokesman Jim Gradl said the project had taken longer than expected.
"We have enjoyed a good working relationship with PNC Bank over a number of years in connection with our project in Shiloh, Ill.," Gradl said. "Unfortunately the timeline for the project extended far beyond anybody's original expectations."
In May 2006, the suit claims, McKee's holding company Havenhills Investment Company, LLC and Corn Belt Bank & Trust, as trustee of an entity called Land Trust #125, took out a $3.7 million loan from National City Bank. A second loan of $8.3 million in November of that year superseded the first loan, according to the suit.
By June 2009 McKee had entered into a forbearance agreement with National City Bank; it was followed by a second agreement in September of that year. National City Bank merged with PNC in November 2009. PNC claims McKee and several of his holding companies entered into a third forbearance agreement in May 2012. The bank demanded full payment in August 2014.
PNC claims in the suit that McKee and Carlinville National Bank, which bought Corn Belt Bank after it failed in 2009, now owe more than $10 million. It’s asking the court to put the entire development into receivership, giving control to a neutral third party until the suit is settled.
Gradl said they’re working with PNC.
"In conjunction with our lender we have developed a plan to accelerate the disposition of large areas of the project," he said.
McKee is facing two other loan default lawsuits in Missouri, both brought by Kansas City-based Titan Fish Two. The first, filed in St. Charles County in March, claims McEagle Properties owes $2.5 million. The second suit, filed in St. Louis County in April, claims Northside Regeneration owes more than $17 million.
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