Compeer, a loan-lending bank, is asking a district court judge to drop a Canadian-owned swine operation’s counterclaims.
Sunterra is under investigation for an alleged check-kiting scheme that left them millions in debt and unable to afford daily operations. A judge placed all of Sunterra’s pigs and operations — some of which are in South Dakota — in receivership.
Sunterra now accuses Compeer of negligent misrepresentation. The bank claims Sunterra doesn’t even have the power to bring those grievances in court.
Compeer said the counterclaims brought against the bank fail to meet the federal “particularity” standard required to bring fraud charges in court. Negligent misrepresentation is considered fraudulent behavior.
The bank said if Sunterra wants to bring those charges, Sunterra needs to provide the answers to some simple questions:
- Who from Compeer led Sunterra to believe the bank understood check kiting for the defendants was acceptable?
- When and how did Compeer lead Sunterra to believe this?
- What alleged actual misrepresentations were made and what were the specific contents of those misrepresentations to lead Sunterra to this understanding?
Compeer said those and questions were “entirely ignored” in the counterclaim and fail to meet the federal standard.
Though the bank said those arguments aren’t even necessary, because it believes Sunterra doesn’t have the legal power to bring claims in court on the matter.
Compeer said under the receivership agreement “only the receiver can assert claims arising from those loan agreements.”
In the agreement it said “any claims and causes of actions that defendants may have against third parties” belong to the receiver. That’s because precedence set says once “appointed, the receiver stands in the shoes of the entity it represents.”
For those reasons, Compeer is asking the district court to dismiss all of Sunterra’s counterclaims.
