LTS Management’s Del Kimball and Sam Furseth default to another creditor
In April 2014, an entity called NorthRock LLC filed suit in Jackson County court against Del Kimball, Sam Furseth and several of the online payday-lending companies they owned and operated. According to the suit, NorthRock was formed for the purpose of providing loans to intermediary entities — primarily KSQ Management, owned by Joel Tucker — that in turn lent money to Kimball and Furseth’s online lending companies. In 2013, Kimball and Furseth stopped paying back the loans. NorthRock alleges that the loans it made were guaranteed and is seeking from Kimball and Furseth the full amount: $35 million.
In January of this year, an agreement was reached whereby Kimball and Furseth would pay monthly $50,000 installments to NorthRock — a fraction of the monthly payments due under the original note agreement, according to NorthRock — for a one-year period, until Kimball and Furseth could figure out a way to pay off the $35 million principal NorthRock alleges it is owed.
So far, three payments have come due. NorthRock hasn’t seen a penny.
If NorthRock operated like Kimball and Furseth’s companies, it could just electronically drain all the money from Kimball and Furseth’s bank accounts. Instead it must proceed through judicial means.
According to a filing in the case yesterday, NorthRock is now seeking immediate judgments on the $35 million. A ruling in NorthRock’s favor would permit it to begin taking collection action against Kimball and Furseth.
Via their attorney, John Mullen, Kimball and Furseth issued the following statement:
“As a result of unprecedented regulatory pressure on our banking partners and despite no allegation of having violated any rule, regulation or statute, the Obama administration pressured our banks to stop doing business with us. As a result, we were forced to lay off over 100 employees and we lost our ability to pay our bills including investors like Northrock. In attempt to try to recoup some of Northrock’s loss, we entered into a settlement agreement that provided for certain interim payments while we worked on a larger global solution. Unfortunately, we were not able to complete those payments. We will continue to work with all of our investors including Northrock to fulfill our obligations to them.”
Northrock’s attorney declined to comment.
Kimball is also being sued in Colorado for defaulting on payments to Chesapeake Enterprises, a D.C. consulting firm run by Republican strategist Scott Reed. That suit alleges that Kimball owes Chesapeake $575,000.