By Megan Sayles
AFRO Business Writer
msayles@afro.com
The Md. Washington Minority Companies Association (MWMCA) has called attention to an eight-count lawsuit filed by a local Black entrepreneur against Fulton Bank, a Small Business Administration (SBA) preferred lender.
According to the complaint, Baltimore resident Pless Jones Jr. attempted to obtain a loan from Fulton Bank in 2019 in order to purchase his father’s construction business, P&J Contracting. The financial institution had concerns about approving the loan because of a 2014 consent decree that his father, Pless Jones Sr., agreed to for a property associated with the business.
The consent decree in question was related to the cleanup of a property in East Baltimore. The agreement was entered into by Jones Sr. with the Maryland Department of the Environment (MDE), which is also named as a defendant in the suit.
Allegedly, Fulton Bank initially told Jones Jr. that he should not have to become party to the consent decree in order to purchase the business. But, the bank changed its stance, and Jones Jr. has claimed that he was coerced into becoming party to the consent decree in order to obtain the loan and assume ownership of the business.
Jones Jr. alleges that he was made to think that he would need to take over the responsibilities of the consent decree although there was no legal obligation on his part. Instead, the burden should have fallen on the seller who initially entered the consent decree, according to the complaint.
MWMCA’s president, Wayne Frazier, led a press conference at The Woodberry, located at 2001 W. Cold Spring Lane, on Jan. 2 to discuss the lawsuit.
“Fulton Bank, as the lawsuit states, placed Mr. Jones’ business in a position that would cause a default sooner or later because the cash flow would have to be siphoned off of his business to pay for improvements to a property the bank did not even secure as collateral,” said Frazier. “There was no statutory standing for the bank to include that property as collateral for that loan.”
Frazier said that he believes Fulton Bank had no lawful reason to bring Jones Jr. into the consent decree agreement.
“He had nothing to do with it,” said Frazier. “That land wasn’t a part of the collateral. I keep going back to why? Because it may affect other Black-owned and women-owned businesses in this town.”
In addition to issues with the actual loan, Jones Jr. alleges that the bank was unethical in their attempt to handle problems related to the consent decree. Jones Jr. says in September 2020 Fulton Bank advised him to procure legal counsel from Todd Chason, resident agent at Gordon Feinblatt, to help resolve the consent decree issue with MDE. Jones Jr. would later come to discover that Chason was also representing Fulton Bank, according to the complaint.
A couple months later, the complaint claims that Chason told Fulton Bank they had reached an agreement with MDE that involved withholding $500,000 from the loan to place the funds in escrow as a security measure in the event that Jones Sr. failed to adhere to the consent decree.
Shortly after, Fulton Bank told Jones Jr. that MDE was requiring him to join the consent decree and that he would be unable to obtain a loan if he refused, according to the complaint. In December 2020, Jones Jr. signed the consent decree and closed the loan to purchase P&J Contracting. At that point, he assumed all terms, conditions and requirements of the agreement.
“Defendants Fulton Bank, MDE, Gordon Feinblatt and Chason worked together to coerce Mr. Jones into being added as party to, and signing, the second consent decree,” according to the complaint. “There was no statutory requirement or legal authority which required Mr. Jones to be added as a defendant to the second consent decree.”
The complaint accuses Fulton Bank, MDE, Chason and his law firm of crimes, including civil conspiracy, breach of contract, legal malpractice, negligence, intentional misrepresentation, negligent misrepresentation and punitive damages.
A Fulton Bank representative told the AFRO that it was against company policy to discuss pending litigation with news media.
Jones Jr. is seeking a judgment in excess of $75,000, according to the complaint.
Megan Sayles is a Report For America corps member.
