The owner of American Electrical Services and The Vault building
said his contracting business will not be forced to close and he
can keep the restaurant structure now that the bank foreclosing on
his income source has agreed to an extension on his matured line of
credit.
HOLLISTER
The owner of American Electrical Services and The Vault building said his contracting business will not be forced to close and he can keep the restaurant structure now that the bank foreclosing on his income source has agreed to an extension on his matured line of credit.
Business and building owner Ignacio Velazquez told the Free Lance that Heritage Commerce Bank representatives Thursday agreed to another 120-day extension, similar to others he had received after his 12-month financing period matured in July. American Electrical owed $1.8 million on the $2 million line of credit, or loan.
Heritage earlier this month had foreclosed on American Electrical’s income from clients and noted its intention to take The Vault building because it is collateral on the loan. Velazquez this week in response filed a lawsuit against the San Jose-based bank alleging it misled him and a host of other accusations while requesting that Heritage end its practice of pursuing direct payments from Velazquez’s clients.
He stressed how he never made a late payment and said he had sought an extension for his loan before Heritage took action this month.
After a judge’s ruling Wednesday to deny his request for a temporary restraining order to halt the bank from continuing its action, Velazquez had pronounced that the electrical business would have to close, leaving 50 employees out of work. It also left open the likelihood that Velazquez would lose his restaurant building.
He said the bank “backed off” and extended his line of credit and he said the ordeal was due to a “breakdown in communication.”
He said “everything’s normal” now and asserted his point in the legal action was that “you can’t just push people around.”
The bank has responded by telling American Electrical customers to ignore the prior notice, he said.
“They’re already sending letters out saying forget the first letter and everything’s fine,” he said.
A Heritage Commerce Bank marketing official in San Jose said the company does not comment on legal matters when reached Thursday.
