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.

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