Canadian bank seeks to recoup entire line of credit

Updated: September 25, 2007, 6:07 PM ET
By Len Pasquarelli | ESPN.com

ATLANTA -- Already under indictment on federal and state charges related to dogfighting activities, embattled Atlanta Falcons quarterback Michael Vick is being sued by a Canadian bank which claims he is in default on a $2.5 million line of credit he received in January.

The Royal Bank of Canada, which conducts business in the United States as RBC Centura, has filed suit in U.S. District Court in Newport News, Va., seeking payment on a promissory note Vick obtained for what he told the bank were real estate investments.

The lawsuit was first reported by the Daily Press of Newport News and confirmed Tuesday afternoon by a court clerk.

Calls to the Royal Bank of Canada were referred to the bank's attorneys who did not return messages. Vick's attorney, Lawrence Woodward, did not return a message.

When the suit was filed last week, the balance on the line of credit was $2.313 million. The bank is demanding payment of the full amount, interest of $499 per day, commencing on Jan. 19, and legal fees.

The suit, filed with District Judge Henry C. Morgan Jr., contends that Vick was apprised in writing of the demand for payment by Sept. 10, and that he did not meet the deadline. It further states that Vick did not provide the bank with financial statements that were required as part of the loan agreement.

Vick obtained the line of credit on Jan. 18 and shortly thereafter filed papers acknowledging that the money was to be used for real estate investments, and that "such proceeds were not to be used primarily for personal, family or household purposes."

The lawsuit cites elements of the loan agreement which stipulate that Vick, who has been suspended indefinitely by the NFL, is in default if there are any changes in his employment status which might impact his ability to repay the note.

"The criminal charges and resulting impact on the Defendant's employment . . . materially affect his ability to repay the Term Note," the lawsuit argues.

The Falcons have filed a non-injury grievance against Vick and are attempting to recover $20 million of the $37 million in bonuses paid to him as part of the 10-year, $130 million contract extension signed on Christmas Eve 2004. An arbitration date of Oct. 4 has been set for that action.