Liberia Bank for Development and Investment (LBDI) has filed an “Action of Debt” against Eco Timber-Liberia Limited and its Ghanaian partner, Logs and Lumber Limited, at the Commercial Court at the Temple of Justice in Monrovia, to recover US$1,239,663.17 in unpaid loans.
Eco Timber is an investment company operating in the forestry sector in Liberia.
The amount, the bank lawsuit claimed, “represents upgraded principal, interest, legal fees and cost of travel to and from Ghana for payment of the consolidated and restructured loan facility.”
The suit, filed in January this year, alleges that Eco Timber is a wholly owned subsidiary of Logs and Lumber Limited based in Kumasi, Ghana, with 60 percent shares, and which through its authorized legal interventions of its officers guaranteed two separate loan transactions as working capital to facilitate the production of round logs in the country.
As a result, owing to several interventions and guaranties from the co-defendant, Logs and Lumber, the bank extended the first US$300,000 overdraft facility to Eco Timber to be repaid within 6 months, with 11 percent interest per month, commencing the date of booking, and an advance of US$400,000 facility to be paid within 90 days with a default commission of 2 percent per month, the lawsuit further alleged.
In addition to Eco Timber’s overdraft balance of US$206,859.36, on October 24, 2011, it requested and received from the bank US$40,000, which increased its overdraft to US$246,859.36, all to be paid within four months, inclusive of a one-month grace period.
On December 28, 2011, the bank and defendant, Eco Timber, also executed an MOU, on which the two loans were consolidated and restructured, giving the total aggregate amount of US$622,933.70 to be fully liquidated within 24 months, beginning after the date of booking.
According to the lawsuit, the defendant’s consolidated outstanding balance has been on the books since December 20, 2012, and has now accrued interest, charges and other fees up to October 20, 2016 which, the bank claimed, now stands at US$1,239,633.17.
“There [have] been no deposits made into the defendant’s account, and that on a daily basis, their income has bloated by this uncollected liquidation.
“As a result of the defendant’s continued failure, refusal and neglect to honor its consolidated and restructured facilities over the years, the loan now stands upgraded at US$1,239,663.17, inclusive of outstanding principal, interest and legal fees and travel cost,” the bank complaint claimed, adding, “Notwithstanding several honest demands and approaches made by the bank to the co-defendant, Logs and Lumber, as guarantor for the settlement of the consolidated and restructured facilities, the co-defendant has failed, refused and neglected to do.”