Devine acknowledged Tuesday to The State newspaper that she made a mistake on the loan involving
How the loan was handled came to light in the wake of the borrowers' default on the loan. The city tried to collect but was told by a judge that it had no standing because the loan was not properly recorded.
Devine, who agreed to a detailed interview about the loan, also said she notified her malpractice insurance carrier earlier this year when she learned of questions about the paperwork. Her actions before and after learning of the questions are ethical and proper, Devine said.
Council is to take up Devine's handling of the
It is unclear what, if anything, council might do. The code of lawyer ethics, however, requires that any attorney who knows of possible misconduct by another lawyer report it to the
Devine said she will not attend the meeting because she has long-standing plans to attend an out-of-state conference.
She said she's concerned about the way the dispute is being handled by the city and, in particular, by Councilman
Further, Devine said, Runyan is playing politics with the issue: "It is being used as a political means to embarrass me and my law firm," Jabber & Isaac, she said of Runyan's inquiry, which began last month. "If the city has a loss, that's what insurance is for."
Devine and Runyan have had several public policy run-ins and do not get along personally. Other than the mayor, they are the only council members elected citywide.
Runyan said he had a duty to bring the issue to council once he learned of it. "The taxpayers are out approximately
Runyan said that someone involved in the city's loan program brought the issue to his attention.
He said he will ask council Wednesday to release a summary memo about the findings of city attorney
Sources say Gaines' office has determined that Devine did more than fail to have the mortgage documents notarized. She did not file the mortgage obtained through the city loan in the
Devine disputes that. She said she filed a "security agreement," which she said is tantamount to a mortgage, in the deed office. That agreement puts up the equipment and fixtures at Carolina Procurement as well as the buildings for collateral on the loan, Devine said. The property was purchased using two loans. The first was a
Devine said she also failed to have documents for the first loan notarized.
Failure to file the proper documents in the city loan made to
The difference between the size of the loan and the court's decision is
Efforts to reach the Washingtons on Wednesday evening were unsuccessful.
The loan was approved through the city's commercial revolving loan program, which is designed to help start-up businesses in
City files have no record of any payment from the Washingtons. The city declared the loan delinquent in
But the couple had filed for Chapter 11 bankruptcy a year earlier, on
Duncan wrote in his order dismissing the case that the Washingtons have "a long history of financial difficulties," which they blame on health problems that date to
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