Webster Bank said Tuesday it will appeal an Ohio jury’s $19 million damage award to the developer and owners in a condominium conversion project.
The Waterbury bank said in May 2006 it lent about $5 million to buyers of the 24 units in Broadwin condos in Columbus, Ohio. The debts, structured as construction loans, were guaranteed by the developer, Webster said in a filing with the Securities and Exchange Commission.
Yet, when the lenders defaulted, the bank said it tried recovering ts $5 million investment. But when the bank refused to fund any more construction draws for the conversion project, the developers and condo owners sued Webster.
The Franklin County, Ohio jury sided with the defendants and awarded a total of $6.8 million in compensatory damages and $12.15 million in punitive damages, plus attorneys fees. Â
Webster said the court will enter its judgment shortly and the bank will then have 30 days to file an appeal. The bank said it expects to record a $18.95 million reserve in the second quarter to cover the amount in case it loses the appeal, which it says could take several years to resolve.
