Judge Awards Velocity $1M, Says UT Bank Altered Terms
SALT LAKE CITY—A federal judge has awarded Velocity Press nearly $1 million, saying that KeyBank Utah defrauded the commercial printer by changing the terms of a loan without its knowledge, The Salt Lake Tribune reported.
According to U.S. District Judge Ted Stewart, KeyBank officials rewrote the financial arrangement Velocity had made with Sanden Machine for the purchase of a $1.8 million customized press in 2006. The judge ruled Velocity would not have signed off on the loan agreement had it known what KeyBank had done.
KeyBank was ordered to pay more than $900,000 for expenses Velocity incurred and attorney fees.
Velocity had inked a contract with Sanden Machine and had arranged for financing with another bank when it was contacted by KeyBank, which offered a more attractive deal. However, KeyBank green lighted the deal without requiring a letter of credit or a security agreement from the press manufacturer. At this point, Velocity had already made an $80,000 partial down payment to Sanden.
Prior to the loan closing, KeyBank told Sanden it needed a letter of credit before releasing a second payment to Sanden. Judge Stewart ruled that Velocity owner Drew Elkins was never informed of the requirement or other changes negotiated by Sanden and KeyBank.