Court: Bank Should Have Seen Red Flags
GRAND RAPIDS (WWJ) – A judge in Grand Rapids says Huntington Bank could owe as much as $73 million in a bankruptcy case related to fraud at a high-tech company.
Huntington lent money to Grand Rapids-based CyberNET. Bankruptcy Judge Jeffrey Hughes says the bank should have known that CyberNET and its affiliates were committing fraud and raised a flag about the problems.
A bankruptcy trustee is trying to recover millions of dollars for finance companies that had lent money to CyberNET for computer servers and other equipment.
The money instead was used for a lavish lifestyle enjoyed by owner Barton Watson and his wife.
Huntington Bank is planning to appeal.