Insurance Firm Sues Covington for Defaulting on $3.6 Million in Loans
Industrial Indemnity Insurance Co. has filed suit in Orange County Superior Court against Covington Development Group, demanding $3.6 million from the Fullerton-based residential builder in repayment of two loans originally executed in 1985.
Covington acknowledged that it is in default on the notes. But Covington’s chief financial officer, Robert Vedaa, said the company will claim in defense of its non-payment that Industrial Indemnity failed to honor a 1987 agreement to insure and defend Covington against suits arising out of its 1985 decision to stop its general contracting operations.
In an unrelated matter, Vedaa said the company’s Covington Homes/Inland Empire subsidiary, which was released from a Chapter 11 bankruptcy proceeding earlier this year, has paid off its $3.7-million construction loan from FarWest Savings and is reactivating its Riverside County development.
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