TD Bank and franchisor sued over lending practices involving U.S. guaranteed small business loans

From Shane D. Gosdis at the franchiselawblog.net, on December 8, 2011 (Franchisees Sue Matco Tools and TD Bank Alleging Loan Fraud Scheme):

The plaintiffs allege that Matco Tools and TD Bank “in a loan fraud scheme to encourage unsophisticated borrowers to enter into risky business loans to buy Matco Tools franchises.”  According to the plaintiffs, the “scheme enabled Matco to sell more franchises and TD Bank to make risky loans without concern” because the “bank knew if the loans failed, the loans would ultimately be repaid by the United States taxpayers through the SBA guaranteed loan program.”

Copy of Verified Complaint and Jury Demand (download, 24 page pdf)

Moving attorney estimates a class action suit involving “between 150-to-200 plaintiffs” stretching back until at least 2004.

Other coverage:

• The Villanos v. Matco Tools, TD Bank, Franchise Times, January 20, 2012
• Matco Tools, TD Bank Franchise Class Action Lawsuit: Something Screwy?, http://www.lawyersandsettlements.com, December 6, 2011
• TD Bank tool case: Suit alleges small-biz loan scheme, Mark DeCambre, New York Post, November 15, 2011

Cross-posted on FranchiseBanker.ca