Bloomberg Business reports on the on going battle by the lender with the Veneto and it does get messy.
Deutsche Bank AG is locked in a foreclosure battle with a Panama casino, which fired back saying a bank executive once pleaded with the resort’s president for a personal loan to cover gambling debts.
Veneto Hotel & Casino SA sued a unit of the Frankfurt-based lender on Monday, accusing it of crippling the 300-room Panama City complex by freezing accounts and funds used to cover operating expenses. At one point, a sleep-deprived Deutsche Bank employee asked the client for an emergency loan to cover gambling debts, according to the complaint filed in New York state court. The banker says that’s not true.
Two months ago, Deutsche Bank sued brothers Andrew and Alexander Silverman and their father, saying the casino they controlled diverted money that was supposed to go toward repaying its $55 million loan balance. Deutsche Bank financed the Silvermans’ acquisition of the resort in 2007, as part of an ill-fated foray into casino development that also resulted in losses in Las Vegas. The unit that made the loan, German American Capital Corp., started foreclosure proceedings in Panama in March, according to Deutsche Bank’s lawsuit.
According to the Veneto’s lawsuit, the resort’s business was disrupted in 2014 when Deutsche Bank tried to sell the debt. During that process, confidential financial information was spread “throughout the Panamanian community,” insinuating that the business’s “future was in jeopardy.” About 75 employees resigned, losses piled up and then, after Deutsche Bank tried to collect the loan’s balance, Panama’s gaming regulator put a receiver in charge of the business.
‘Bad Spot’
The casino’s lawsuit says the requests for a personal loan came in 2010 from Marc Levine, then a director at Deutsche Bank. He allegedly sent a pair of e-mails to Alexander Silverman, noting in one that he’d slept only about five minutes the night before.
“I wouldn’t ask if it wasn’t super serious, in a real bad spot here,” Levine wrote, according to the complaint. “Don’t want these guys coming to my house.”
Silverman refused, and Deutsche Bank sought years later to damage the resort, “whether or not driven by a retaliatory motive,” according to the complaint.
The allegations aren’t true, Levine said in a phone interview, adding that he hasn’t worked at the bank since October 2013.
‘Divert Attention’
Deutsche Bank describes its broken relationship with the borrowers differently in its lawsuit, also filed in New York state court. The casino defaulted in January by failing to make its regular monthly payment, according to the complaint.
Deutsche Bank said it sent investigators to Panama to look into the casino’s finances, who found that the resort was reporting more revenue than it was depositing in its bank accounts. The business “has not explained what it did with the missing funds,” according to the bank.
“This is a veiled attempt by the bank to divert attention from the facts surrounding their wrongful acts,” said Warren A. Estis, an attorney for the resort.
Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment on the dispute.
The cases are German American Capital v. Silverman, 651081/2015, and Veneto Hotel & Casino SA v. German American Capital Corp., 651888/2015, New York State Supreme Court, New York County (Manhattan).
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