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Penn
proves elusive on set for his latest movie
Newberg police chief will retire
Board OK's land purchase for schools
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Husein will take fight to BP and bank |
Former owner of Dundee Arco station claims fraud,
sues bank and fuel distributor |
By David Sale, Newberg Graphic
reporter
E-mail David at
dsale@eaglenewspapers.com
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DUNDEE — Businessman Shaik Husein claims it was no accident that his
ARCO station went out of business, and will sue to prove it.
Husein alleges the company that financed construction of the
station, Pinnacle Bank of Oregon, made unauthorized charges to his
account, including payments to a subcontractor, that drove his
business into debt.
He has also filed suit against parent company British Petroleum,
alleging that: “Pinnacle conspired with and caused BP to return
$189,000 of funds ... which Pinnacle had promised to pay on (his)
behalf,” according to a claim filed in Yamhill County Circuit Court.
The claim further alleges: “Pinnacle caused the reversal ... so
that BP could financially force (Husein) out of the station and be
forced to sell the station to BP. As a result of the acts of
Pinnacle, BP used the excuse of the negative balance to force (Husein)
to pay more for gas than required under the franchise agreement ...”
Pinnacle Bank foreclosed Oct. 3 on the ARCO station, stating that
Husein had defaulted on his loan and was more than $2 million in
debt, including interest charges.
BP West Coast, the franchise owner, has since assumed the debt
obligation, preventing the sale of the property. An auction has been
tentatively scheduled for Oct. 24.
“We’ve filed suit to stop the foreclosure — there was not enough
information provided to my client,” said Husein’s attorney, Terry
Slominski. “He was promised new financing, and all the while the
bank was starting its foreclosure proceedings. We’re claiming a
breach of contract.”
Representatives of Pinnacle had no comment on the allegations. A
spokesperson for British Petroleum could not be reached by press
time. However, the fuel distributor has filed a motion to transfer
the case into federal court.
“They have the right to do so, under the Petroleum Marketing and
Practices Act. I could ask for a remand (to another court or
jurisdiction), but I don’t particularly mind,” Slominski said.
The ARCO station and its foreclosure has also been the subject of
considerable debate in the Dundee City Council. The City of Dundee
is also one of Husein’s creditors, seeking back taxes owed under a
two cents-per-gallon municipal fuel tax.
Despite council concerns that the tax caused his foreclosure,
Husein considers it a relatively minor factor in the loss of his
business.
“That was part of it,” he said, “but I had construction cost
overruns, and (Pinnacle) gave me the runaround — I never had a
chance to breathe.”
In August 2003, Husein applied to Beaverton-based Pinnacle Bank for
$3.6 million in financing, in the form of a $2 million construction
loan and an additional line of credit, both secured using the gas
station property as collateral.
At the bank’s recommendation, Husein contracted with national firm
Grace Construction to build part of the station. Husein says the
contractor’s work had to be redone, and when he refused to authorize
payment, bank representatives threatened to cut off his line of
credit.
“They had too many change orders, and were running the price up —
my attorney advised me to fire them,” Husein said. “I since learned
that Grace Construction defaulted on loans from Pinnacle, and
Pinnacle was using the line of credit to pay themselves.”
Unable to secure outside financing as a result of the outstanding
construction loan, Husein arranged with Pinnacle to make payments,
in the form of electronic fund transfers (EFTs), to BP for its fuel
shipments.
At this point, Husein claims, Pinnacle arranged to revoke the
electronic transfers so that BP was not paid, while BP in turn
shorted his fuel deliveries, providing less gasoline than he had
purchased.
“Pinnacle and BP are acting to squeeze me out of the property so
that BP can buy (it) for a million or so less,” he said.
Nevertheless, Husein remains confident: “I don’t have any intention
of filing for bankruptcy,” he added. “I’m very optimistic that the
judge will find in my favor.” |
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From
Oct. 18,
2006, Newberg Graphic
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