Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 16, 1990 TAG: 9005160669
SECTION: VIRGINIA PAGE: B3 EDITION: EVENING
SOURCE: Associated Press
DATELINE: LENGTH: Medium
A jury in U.S. District Court began hearing the breach-of-contract case Monday and the trial is expected to last through Friday.
Joe Shumate Jr., 60, who is representing himself before Judge Glen Williams, said NCNB charged Coleman excessive interest from 1978 through November 1982.
Stephen Hodges, an Abingdon lawyer representing NCNB, said the interest charged on the loans during the four years, $388,198, was in line with the contract terms and had no significant impact on the company's failure.
Coleman Furniture's sales plummeted from $18 million to $7 million, and that is what led to the bankruptcy, Hodges said Tuesday during a break in testimony. Pulaski Furniture Corp. bought Coleman Furniture from a trustee after the company declared bankruptcy.
Pulaski Furniture Corp. bought Coleman Furniture from a trustee after the company declared bankruptcy.
In October 1987, NCNB Financial Services agreed to pay the trustee about $650,000 in a court-approved settlement of a complex package of claims and counterclaims extending over several years.
Roy Creasy, the company's trustee, had charged NCNB with interest overcharging, conspiracy to injure Coleman Furniture's business, waste and fraud.
NCNB denied the charges and did not admit liability in the settlement.
Williams dismissed several of the civil charges, but left the interest overcharge question to be decided by a jury.
Robert Fulton Stauffer, an associate professor of economics at Roanoke College and Shumate's expert witness on banking, testified today that NCNB repeatedly charged businesses a lower rate of interest than Coleman Furniture.
"We strongly suspected NCNB was lending at a much lower rate to other customers," Stauffer said. After going through loan documents from 1978 through 1982, "I was able to find a substantial number of those."
by CNB