ANCHORAGE, Alaska -- Denali Alaskan Federal Credit Union filed a lawsuit last month accusing Lee Baker Jr., a prominent home builder here, his business associates and his wife, Pat Baker, a real estate agent, with fraud.
The lawsuit stated that the total debt owed is $16.9 million, plus interest and fees, and sought punitive damages.
According to a story in the Anchorage Daily News, Baker received the loans for building projects in Anchorage and the Matanuska-Susitna Borough. The credit union attributed its $2.8 million loss in 2007 to the bad loans, but Denali Alaskan Associate Vice President of Marketing Keith Fernandez said they represented only about 4% of the CU's total loan portfolio.
The suit alleges that the couple used some of the loans for unauthorized expenses and that Lee Baker made false statements to the credit union in order to secure more loans. The Bakers denied the allegations. "These are ridiculous accusations, and they will be proved as false," said Pat Baker.
Lee Baker, who owns Discovery Construction Inc., also denied the accusations in court filings. Baker's bankruptcy lawyer Erik LeRoy said the only way his client will be able to pay off the claims is if the housing market rebounds.
The Denali Alaskan suit asked a judge to order the foreclosure of a number of Discovery Construction's undeveloped or unfinished condo units. The lawsuit also targets delinquent loans on the Bakers' home, their Whittier boat slip and their Anchorage storage yard. The credit union also seeks to repossess Lee Baker's 2003 Wild West Vigilante motorcycle.