Sunwest owes PremierWest more than $30 million

Mail Tribune

PremierWest Bank has more than a passing interest in the financial woes of senior housing provider Sunwest Management of Salem, as well as its founder and former chief executive Jon Harder.

Both Sunwest Management and Harder owe the Medford-based bank money.

Of the $61.5 million PremierWest reported as nonperforming assets at the end of the third quarter of 2008, Harder and Sunwest Management accounted for $30.8 million, PremierWest President and Chief Executive Officer Jim Ford confirmed Monday.

In November, PremierWest filed foreclosure action against Middlefield Oaks and its owners, and in December, Lane County Circuit Judge Karsten Rasmussen declared the company in default on the $5.5 million loan in question in November. He appointed Paul Williams & Associates as receiver in December.

Last month, PremierWest took similar action against the Addie Meedom House in Crescent City, Calif. The owners of the property took out two loans for a combined $7 million in 2005, and the assisted living facility defaulted on both loans last summer while still owing the bank more than $4.8 million.

Its legal action to collect the debts was slowed when Harder filed for personal bankruptcy on Dec. 31.

Aside from Sunwest Management, Harder also had a development loan in Salem and on undeveloped east Medford property.

Ford said court activity will go a long way toward recovering loan losses.

"It's always good, to the extent you get cash for (mortgage properties) or they go back to (earning interest)," Ford said. "We're fortunate in the level of non-performing loans we have is concentrated in a small number of borrowers."

With the future of the properties in the hand of a court-appointed receiver, PremierWest now waits for the process to unwind.

"Every nonperforming loan is unique," Ford said. "When you are working with someone who is taking over (a property), do you take paying off the loan at discount and the cash? Or do you want an accruing loan? That's the decision that has to be made based on appraised value or what you believe the value to be. It would be factual to say either is preferred to our current position."

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