The developer of a stalled commercial project in the Korean Business District of Garden Grove has won an $11.6 million judgment against Cathay General Bancorp over a disputed construction loan.
The Los Angeles-based holding company for Cathay Bank initially sued Garden Grove Galleria LLC in 2010, claiming the developer’s investors had defaulted on a $42.5 million loan from it and two other banks.
The developer then sued the bank, claiming a breach in the loan agreement. A report in The Garden Grove Journal said the developer accused Cathay of improperly refusing to release the full amount of the loan in 2009. That came after the bank required the developer to put more money into the deal based on a reappraisal of the property to a lower value, according to the report.
The eight-story project, set to run almost 130,000 square feet, has seen little work during the past five years.
Crowe is a reporter for the Los Angeles Business Journal.
