BoG sues ex-Fund chief, wife over $.8M loan

The Bank of Guam has sued former Retirement Fund administrator Karl T. Reyes and his wife over alleged non-payment of an $867,800 loan.

The bank sued Reyes and his wife Virginia for breach of contract, conversion, and unjust enrichment.

The bank also named as co-defendants tenants of the Reyes couple’s King’s Plaza commercial building who may have claims in the mortgaged building and lot.

The tenants are Herman P. Sablan; CNMI-USA IBPC, also known as IBPC or International Business and Professional College; Benigno T. Fejeran; Modern Investments Inc., owner of Saipan Ocean View Hotel; Karl Reyes Jr.; Sallie Sablan; Northern Mariana Islands Council for Humanities; and MP Corp., owner of Mercy’s Beauty/Barber Shop.

The bank, through counsel Robert T. Torres, asked the Superior Court to find the Reyes couple liable to pay the bank $867,800 plus $14,731 in pre-judgment interest.

When contacted for comment yesterday, Karl T. Reyes said he had already turned over the King’s Plaza property to Sablan and IBPC since last October and that under their agreement they’re supposed to be paying the bank directly and not him.

“I might be forced to open it [property] up for sale to anybody who can make the payment [to the bank],” he said.

The bank asked the court to order that the real properties given as security for the Reyes couple’s promissory note be sold and that proceeds of the sale be used to pay the balance due.

It also asked for an order that all defendants and all persons claiming under them be barred and foreclosed of all right, claim or equity of redemption or other interest in the real property.

The plaintiff also sought for an order against all defendants and all persons claiming under them that the collateral assignment of leases and rents be directed to the bank and be applied to the payments of the balance due.

Karl T. Reyes and Virginia Reyes obtained a loan of $889,523.75 from BOG on Aug. 25, 2006.

Torres said the Reyes couple are in default on the promissory note and have failed to make any payment on the notice since Oct. 31, 2007. As of March 10, 2008, he said, the Reyes defendants owe the bank $882,800 in principal, interest, and late fees.

Torres said that on April 25, 2008, a letter regarding automatic revocation of license for collection of rents and notice of default on the bank loan was served on the Reyes couple.

The lawyer said that on May 6, 2008, tenants and lessees of King’s Plaza were served with the bank’s notice of assignment to remit all future rent payments to the bank’s attorney’s office effective May 1, 2008.

“Despite demand from plaintiff and despite having acknowledged the outstanding balance due, the Reyes defendants have refused and failed and continuously refuse and fail to make their payments,” Torres said.

Instead, Torres said, Karl T. Reyes signed a limited power of attorney appointing Sablan as his attorney-in-fact regarding the mortgage on King Plaza and the Reyes’ loan with BOG.

The lawyer said the bank has since learned that on Sept. 27, 2007, Karl T. Reyes executed an assignment of property assigning to CNMI-USA International Business & Professional College the use of the lot, including the King’s Plaza.