Bank Sues Caps' Fedorov Over Loan Defaults
Wednesday, July 16, 2008
Sergei Fedorov is being sued by a Michigan bank that says the Washington Capitals center has failed to pay more than $2 million in loans taken out four years ago.
According to a lawsuit filed Monday in Macomb County (Mich.) Circuit Court, Fedorov owes Citizens State Bank more than $2.1 million on two separate loans -- one for $1.75 million and another for $500,000. The first loan was made in December 2004, the second in April 2005.
Fedorov, who was traded from Columbus to Washington in February, signed a one-year, $4 million contract extension with the Capitals this week. The former league MVP's previous two NHL contracts were worth a combined $68 million. Court documents did not say why Fedorov took the loans.
Citizen State Bank sent notices of default to Fedorov's Bloomfield, Mich., home in June, according to Scott Norton, the lawyer for the bank.
"Our loan documents show that Mr. Fedorov borrowed the money from us, and that Mr. Fedorov is obligated to pay us the money," Norton said yesterday. "Up until a certain time, payments were being made, but then the payments stopped. When they stopped, we sent notices of default and those went unanswered."
According to the lawsuit, the $1.75 million loan called for 59 payments of about $15,000 and a final payment of $1.353 million. The loan had a variable interest rate of 6.25 percent and was to be paid off by Dec. 29, 2009.
The $500,000 loan called for 59 payments of more than $4,000 and a final payment of about $390,000. It was due to be paid off by April 18, 2010, and had an interest rate of 6.75 percent.
Citizens State Bank is seeking a total of $2,108,405.66, plus costs and attorney fees associated with the case. The lawsuit was first reported in yesterday's editions of the Macomb Daily.
Court documents also say that Fedorov, 38, used the mortgage on his Miami condominium as collateral for the larger of the two loans, and an 11-year-old Oldenburg gelding named Argensohn -- plus a major medical and a loss-of-use insurance policy on the horse -- as collateral to secure the smaller one.
"Fedorov has failed to satisfy the terms and conditions of the loan agreements," the lawsuit said. "CSB has demanded that Fedorov turn over the collateral to CSB. Despite CSB's demands, Fedorov refuses to deliver the collateral. CSB is entitled to immediate possession of the collateral."
Fedorov's Los Angeles-based agent, Pat Brisson, said he was unaware of the lawsuit. A message left for Fedorov's Michigan-based lawyer, Brian O'Keefe, was not returned.