The state Supreme Court has ruled against an area security firm and in favor of United Bank in a years-long dispute over a loan exceeding $700,000.
Lancaster, Pa.-based Kourt Security does business as Select Security. In November 2014, Kourt bought the assets of the Morgantown security firm Secure US from Betty Parmer, of Harrisburg, Pa. Parmer had bought the assets from her nephew, one-time Morgantown businessman Mitch Brozik, in May 2012 for $2.5 million.
Parmer hired Brozik’s firm MB Security to manage the company. But the transaction resulted from and led to various complex court cases, including Parmer suing Brozik in 2013.
In a Tuesday memorandum decision upholding a Monongalia County Circuit Court ruling in favor of United Bank, the Supreme Court recounts that between the time Parmer bought Secure US and the time Kourt bought it from her, MB Security borrowed $827,000 from United Bank, pledging company assets as collateral. Kourt knew of the debt and United Bank’s interest in the assets that were transferred.
The Supreme Court says Kourt turned over part of the money but disputed United Bank’s claim that the collateral included customer contracts, post-sale renewals or extensions of the contracts and any proceeds from them.
United Bank sued Kourt in November 2015, seeking $737,310.42 plus interest, fees and costs. Various actions followed and in March 2019, the circuit court granted United Bank’s motion to secure the collateral. Kourt appealed that ruling to the Supreme Court, saying the circuit court’s ruling was based on three errors.
The circuit court said in it ruling that Kourt conceded it owns the contracts as a result of the sale of Secure US assets and that the contracts had produced, at that time, about $4.2 million in revenue, averaging $140,000 per month.
The Supreme Court commented, “Here, the borrower [Brozik for MB Security] defaulted, Kourt purchased the assets, and the assets are subject to United’s lien.”
It then quotes the circuit court: “The record suggests Kourt has stalled and frustrated, for Kourt’s sole benefit and to United’s substantial detriment, possession of the collateral for several years and delayed the turnover of collateral to which United is entitled.”
The circuit court granted United’s motion to secure the loan collateral with the condition that United return to Kourt any customer contracts and proceeds left after the defaulted loan debt is satisfied.
The Supreme Court reviewed Kourt’s allegations of circuit court error, found no basis for the allegations and affirmed the circuit court ruling.
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