Stephanie Rawlings-Blake, a former mayor of Baltimore, is currently facing a lawsuit brought by an Indiana-based bank concerning a $2 million loan. In the bank’s lawsuit, which was filed on Jan. 8, they allege the monthly payments of $28,000 ended in May 2023, causing the loan to default in July.
According to Fox 45 News, the lawsuit was filed by Old National Bank in the U.S. District Court for Maryland and seeks for Rawlings-Blake to pay the outstanding loan balance, plus interest and late fees, which totals over $2 million.
Per the court documents, the loan was guaranteed to be repaid by Rawlings-Blake herself if the borrower, Gulf Coast Technology Corporation defaulted.
Rawlings-Blake doesn’t dispute that the small business failed to meet her expectations when she guaranteed the loan, in a statement she issued to Fox 45.
“I have worked tirelessly to support small businesses and economic growth. As part of that commitment, I personally guaranteed a loan for a small business I believed would thrive and create local opportunities. Unfortunately, like many businesses, this one has faced significant challenges, and I am now addressing my financial obligations related to this situation,” Rawlings-Blake said.
According to the Baltimore Banner, in addition to Gulf Coast Technology Corporation, Buy MBE, a company that lists Rawlings-Blake as its president and is a majority-minority company that helps local and midsized businesses connect with Fortune 500 companies, also received funds from the loan.
Per the lawsuit, “The defendant absolutely, unconditionally and irrevocably guarantees repayment of the note pursuant to a U.S. Small Business Administration Unconditional Guarantee dated November 8, 2023, from the defendant in favor of the lender, as successor to Capstar Bank.”
As of Jan. 7, the amount owed due to the loan and guarantee was $2,109,114, which includes $1,953,692 in principal, $145,575 in accrued interest, and $9,846 in late fees. In addition to these amounts, the loan’s interest continues to grow at a rate of $562 per day.
When Rawlings-Blake assumed the mayorship in 2010 after Sheila Dixon left office disgraced by scandal, Rawlings-Blake was praised for making a smooth and efficient transition.
By the time she left office in 2016, Rawlings-Blake was also engulfed in scandal, hers was related to how she responded to the city’s unrest following the death of Freddie Gray while in the custody of Baltimore police and the city’s escalating murder rate.
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