Two companies and a co-founder of the Zaxby’s fast-casual restaurant chain have been sued by a federal bank regulator for almost $11.5 million over an alleged loan default.
The Federal Deposit Insurance Corp. said River Bluff Partners LLC defaulted on a nearly $13.8 million loan from Community Bank & Trust, according to a civil lawsuit filed July 24 in Gwinnett County Superior Court.
Zaxby’s Chairman and CEO Zach W. McLeroy and a second company, McRiver LLC, were each listed as guarantors of that loan.
Dan Brannan, an attorney for McLeroy, declined to comment about the specifics of the case. However, he said in an email, “We are confident that the case about which you have inquired will be resolved by agreement between the parties in a manner satisfactory to all parties, including Mr. McLeroy.”
Though River Bluff’s address is the same building as Zaxby’s headquarters, the firms named in the suit and the loan are unrelated to the restaurant company.
Zaxby’s, based in Oconee County near Athens, has more than 580 restaurants across more than a dozen states, according to its Website.
A spokesman for the FDIC declined to comment, citing agency policy related to ongoing litigation.
The loan was backed by several parcels totaling more than 400 acres near Lula in northeastern Hall County, according to information in a June 2011 foreclosure notice in The Times newspaper in Gainesville.
Cornelia-based CB&T issued the loan to River Bluff in December 2007, according to the foreclosure notice. The company renewed the loan a year later.
The FDIC said in the filing that McLeroy and McRiver LLC each guaranteed the debt.
In January 2010, CB&T was seized by state regulators. The FDIC, as receiver of the bank, sold many of its assets to a South Carolina institution that reopened the bank under its original name.
The FDIC, however, took over as “lawful holder” of the contested loan, according to the complaint. In mid-2011, the property was foreclosed and sold for $2.3 million. The FDIC said the defendants owe the “deficiency” of $11.5 million.
McLeroy founded Zaxby’s with a childhood friend in 1990.