A St. Cloud, Minn., bank is reportedly suing Jordan Sands and the Coughlan family after it says they defaulted on a $22 million loan, according to the Mankata Free Press. Stearns Bank said they are still owed $18.5 million and that Jordan Sands is insolvent or in imminent danger of insolvency.
Jordan Sands, which has its office in North Mankato, Minn., has mined silica sand just north of Mankato since getting permit approval for the mine in 2013. In early 2016 the company got the $20 million loan from Stearns and pledged security on the loan that includes land and a long list of personal property including money, investment property and equipment.
The lawsuit said the Coughlans also assigned the bank additional assurance of repayment by James Coughlan, the James Coughlan Trust, Robert Coughlan and the Robert Coughlan Trust.
The bank said that on Jan. 28, following the company’s loan default, Jordan Sands CEO Scott Sustacek proposed that the bank enter into a forbearance agreement while Jordan worked to sell its assets and business as a going concern and evaluate a reorganization of the company.
The bank rejected the proposed agreement. The suit said Jordan Sands told the bank it was selling sand and other minerals at a discounted price and, because its business is not sustainable, it needs to sell off assets.
Stearns Bank’s lawsuit said that because of the default, the entire balance of the note is due. The suit said beyond the $18.5 million due, there is nearly $6,000 accruing daily from interest on the loan.
Stearns said it has demanded possession of the property and other assets pledged for the loan.