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Tuesday, February 23, 2016

Another party joins lawsuit over loans to used car dealer

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Posted: Tuesday, February 23, 2016 12:15 am | Updated: 6:14 am, Tue Feb 23, 2016.

A state Alcoholic Beverage Control agent from Morgan County has joined a lawsuit against Greg Steenson and others to protect his interests as an alleged creditor who loaned Steenson nearly $500,000 for Steenson’s used car dealership.
Steve Ziaja, a sergeant with the ABC, said in court filings that Steenson owes him $464,299 plus interest for loans Ziaja made to Priceville Partners LLC beginning in August 2014.

Former Decatur bank president Harold Jeffreys filed the lawsuit in Morgan County Circuit Court claiming Steenson, who is Jeffreys’ partner in the company, has not repaid him $3.2 million he loaned Steenson to buy used cars.
Jeffreys’ attorneys last week filed a motion asking Steenson be held in contempt of court for allegedly cutting off the power at the company’s Performance Auto Sales lot on Point Mallard Parkway Southeast, selling company assets in defiance of a court order, and threatening Jeffreys and the court-appointed receiver.
Messages left Monday for Jeffreys’ attorney, Andrew Campbell, and Steenson’s attorney, Jimmy Adams, were not returned. Jeffreys was not at home Monday afternoon, a woman who answered the phone said.
Ziaja on Monday referred questions to his attorney, Barney Lovelace.
“I don’t have anything to say, other than that’s the route I have to go,” Ziaja said.
Lovelace said that Ziaja “is a victim in this whole mess.”
Ziaja began a side business of buying and selling used cars a few years ago to make money on the side, Lovelace said.
Ziaja did not know either Jeffreys or Steenson at the time, but eventually their paths crossed and Ziaja sold some cars to Priceville Partners, Lovelace said.
Ziaja holds four promissory notes for loans he made to Priceville Partners from December 2014 to October for Steenson to buy used cars to sell, according to records in the Morgan County probate judge office. Interest on the loans ranges from 5 percent to 17 percent, records show.
Ziaja loaned the company the money based on Jeffreys’ assurances that Jeffreys was at the business “all the time and Harold Jeffreys’ reputation as a respected and smart businessman,” Lovelace said.
Ziaja used “a significant amount of his inheritance” in making the loans, Lovelace said.
“Steve had to file this lawsuit to try to protect himself and get back as much of his loans as he can,” Lovelace said.
Morgan County Circuit Court Judge Steven Haddock has set a Friday hearing to consider motions filed on behalf of Jeffreys and Steenson.
The hearing will cover Jeffreys’ requests to liquidate the company’s assets and to hold Steenson in contempt, and Steenson’s requests for a protective order and removal of court-appointed receiver Ralph Summerford.
Jeffreys filed the lawsuit Dec. 31 claiming that Steenson owes him $3.2 million on unpaid loans. Jeffreys, the former president of then-Heritage Bank, owns 60 percent of the company and Steenson owns 40 percent, according to court filings.
Campbell said earlier Steenson misappropriated the money from the company and Jeffreys.
The lawsuit said two car dealers who Steenson said owed Priceville Partners nearly $7 million did not know Steenson and had never done business with him when Jeffreys became suspicious about Priceville Partners’ financial situation and contacted the dealers.
Steenson denies Jeffreys’ allegations he misrepresented the company’s financial situation and says he has repaid the loans, according to court documents. Steenson in a sworn affidavit “vehemently” denied that he has misappropriated any money.
Steenson in 2002 pleaded guilty to federal bank fraud conspiracy charges related to an alleged check kiting scheme and presenting false financial statements to banks for loans.
He was sentenced to four years and three months in federal prison and ordered to pay more than $5.2 million in restitution to two banks.

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