Local News Spotlight

Judge is asked to dismiss lawsuit against Cleaver company

Updated: 2012-10-01T22:53:17Z


The Kansas City Star

Lawyers for U.S. Rep. Emanuel Cleaver’s company have asked a Jackson County judge to dismiss a Bank of America lawsuit that seeks repayment of more than $1.3 million loaned to the company to buy a Grandview car wash.

In papers filed late Monday, lawyers for The Cleaver Co. LLC said the company admits taking out the loan but denies all other allegations in the case. It also stated that the bank hasn’t presented sufficient facts to warrant a decision in its favor.

The filing asked Judge Charles McKenzie to dismiss the case and award legal costs to the company, which is owned by the congressman and his wife.

Bank of America sued The Cleaver Co. LLC in March, claiming default on the loan the Cleavers used to buy the car wash and demanding repayment. The bank also asked the court to appoint a receiver for the car wash, but the judge denied the request earlier this year.

With penalties and interest, the bank said, the debt has now reached more than $1.5 million.

The loan is 75 percent backed by the Small Business Administration. If the loan goes into full default, the SBA and taxpayers could be responsible for more than $1 million in repayments to the lender.

Cleaver, a Democrat, has blamed the car wash’s problems on a “business dispute.” The Monday filing, however, does not contain details of any dispute.

The judge has set a trial in the case for April.

The Cleavers took out the loan for the car wash before the former Kansas City mayor was elected to Congress. He is now running for re-election in Missouri’s 5th Congressional District.

To reach Dave Helling, call 816-234-4656 or send email to dhelling@kcstar.com.

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