Magazine article American Banker

N.D. Bank Writes off $1M, Sues Former Loan Officer

Magazine article American Banker

N.D. Bank Writes off $1M, Sues Former Loan Officer

Article excerpt

A North Dakota bank holding company wrote off almost $1 million last quarter to cover allegedly fraudulent loans to a now bankrupt company.

Now Bnccorp, Bismarck, a $323 million-asset banking company, is suing the former executive it says extended $1.5 million of loans to the company, which defaulted on the credits.

In a complaint filed in Bismarck's Burleigh County Court, Bnccorp's BNC National Bank is seeking $1.9 million in damages from Debra J. Gronlie, a senior vice president who was dismissed in April, and her husband, Paul Andahl.

In 1995 and 1996, Ms. Gronlie allegedly approved loans for Top Dog Productions of Park Rapids Inc., a Minnesota maker of motion simulator devices, which are used in virtual reality arcade games.

The bank alleged that in return for the loans Tog Dog extended "favorable terms" to the couple for the purchase of motion simulators. According to the complaint, Mr. Andahl has interests in companies that operate motion simulators.

However, Ms. Gronlie's attorney, Maurice McCormick, Fargo, N.D., said this week that Bnccorp's allegations against his client are "absolutely false."

Mr. McCormick said Ms. Gronlie believed all the information she got from Top Dog regarding its equipment was truthful. She and her husband did not benefit financially from BNC National's relationship with Top Dog, the lawyer said.

Mr. McCormick also said BNC National's account with Top Dog was appropriately reviewed by the bank's loan committee. …

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