Published: Wednesday, December 6, 2006
SteelHounds' owner prevents payment
A court issued a temporary restraining order halting the transaction.
YOUNGSTOWN — The owner of the Youngstown SteelHounds team of the Central Hockey League has succeeded, at least temporarily, in preventing the Western Professional Hockey League Inc. from borrowing $100,000 against his company
Herbert L. Washington, president of Blue Line LLC, asked for and got a temporary restraining order against National City Bank in Mahoning County Common Pleas Court on Monday to prevent the bank from sending the hockey league, based in Phoenix, $100,000 from an irrevocable line of credit secured by Blue Line in October.
Washington, in a court filing, said Blue Line secured the letter of credit in October naming the hockey league as the beneficiary.
Filed an affidavit
On Nov. 14, the league's chief financial officer, J. Craig Johnson, filed an affidavit with National City asking for release of those funds, claiming that Blue Line was in default to the tune of more than $25,000 on 2005-06 league assessments and $75,000 in 2006-07 league assessments.
The affidavit said Blue Line had been given 15 days notice of the default and the intent to draw down the funds, as required by the letter of credit agreement.
Washington, in his court filing, however, said he never received any notice until the bank notified him it intended to release the funds on Monday of this week.
The move would make Blue Line, which secured the letter of credit, responsible for repaying that money to the bank.
That prompted Blue Line to seek a temporary restraining order against the bank, and Judge John M. Durkin issued that order Monday, also ruling that a hearing will be set within 14 days on Blue Line's request for a preliminary injunction against the release of the funds.
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