A North Carolina bank has filed a nearly $10.3 million confessed judgment against Baltimore litigator Stephen L. Snyder after it said he defaulted on an $8.5 million line of credit.
Snyder’s attorneys said the action stems from a dispute on the amount actually due under the note.
“The parties have differing views as to the amount owed to the bank,” they said in a statement. “Mr. Snyder … has more than sufficient assets to cover any additional amount claimed by the bank should it be successful with respect to any of its claims.”
In Baltimore County Circuit Court on Friday, Snyder said he has made a good-faith payment of $5 million to resolve the case with Branch Banking & Trust Co. Both sides have agreed to mediate the case to try to resolve their differences, Snyder’s attorneys said.
According to court documents filed by Snyder’s attorneys, he contacted the bank in October to discuss ways to repay the loan; BB&T’s lawyers suggested that if Snyder paid immediately, the note could be discounted or reduced.
After several months of negotiations to sell the note to another bank, First Mariner Bank agreed to buy the loan for $5 million on March 1, Snyder’s documents say. But, by March 9, BB&T withdrew its offer to sell the loan.
“We believe that the documentation is explicit that there was a $5 million offer from BB&T to sell loan documents to First Mariner, which First Mariner accepted,” Snyder said. “To that end, I agreed to tender $5 million in good faith directly to BB&T in satisfaction of the debt.”
BB&T filed the action against Snyder and his wife, Julia Snyder, on March 17. It says Snyder’s loan matured on Sept. 30, 2010, and that Snyder failed to repay the loan and interest.
BB&T’s lawyer, Louis Ebert with Rosenberg | Martin | Greenberg LLP, sent a letter to Snyder on March 16, demanding payment in full by the end of the day, and when payment was not received, filed the confessed judgment case against Snyder on March 22.
Ebert did not respond to several requests for comment.
According to the lawsuit, Snyder owes $8.5 million in principal, more than $440,000 in interest and $1.3 million in attorneys’ fees. Interest accrues on the unpaid principal balance at a rate of $2,420.14 per day.
However, Snyder’s attorneys, Andrew Jay Graham and Amy E. Askew of Kramon & Graham PA in Baltimore, said in court documents that Snyder believes he has paid his debt in light of “BB&T’s refusal to honor the March 1st Agreement” with First Mariner.
On March 28, BB&T sought permission to garnish Snyder’s accounts at First Mariner, “based on newly discovered evidence,” it said, that the Snyders had removed assets from their accounts at First Mariner.
Although a 10-day stay would normally apply, the court directed the clerk to issue writs of garnishment on the accounts at First Mariner. The Snyders’ attorneys said in court documents that their clients were not trying to hide money from BB&T, but rather moved money into Julia Snyder’s BB&T account.
Snyder is known for his brash style and big wins for clients, including $150 million for the 88 Jacksonville families who sued ExxonMobil Corp. after a 2006 gas leak. The oil company has appealed that verdict.
His attorneys said the firm’s large cases require upfront cash in order to be successful, which is why he needed to borrow from BB&T.
In a July 2010 amendment of the loan agreement, the Snyders agreed to allow BB&T to send written notices to ExxonMobil and Prudential Life Insurance Co., which Snyder is up against in a consolidated discrimination case for 73 New Jersey plaintiffs, notifying them of the bank’s interest in the proceeds of their litigation with Snyder.
“The borrower acknowledges that he has informed the lender that there would be significant negative repercussions to his legal practice should the financing statements be of public record in that attorneys with whom his clients are in litigation may learn that the borrower is having financial problems and might therefor [sic] be more willing to settle a particular dispute,” the loan modification says.
According to court documents, Snyder initially borrowed $5 million on Oct. 19, 2007, which was amended on Jan. 10, 2008, to increase the line of credit to $5.78 million. In a Sept. 4, 2009, consolidated and amended note, BB&T extended the line of credit to $7.23 million, due on Feb. 10, 2010.
The size of the line of credit kept increasing and the maturity date got pushed to the end of September 2010.
As additional collateral, the Snyders put up their oceanfront Bethany Beach home, purchased in 1999 for $975,000, according to Delaware land records. They also used their Pikesville home, worth $2.2 million, according to Maryland land records, as collateral.
After the bank extended the line of credit, the Snyders provided the bank with additional collateral, granting a first priority lien on their time share in New York City and on a beachfront Ocean City townhouse on Wight Street valued at $690,000.