Timeline

As the pandemic persisted and it became evident that the mandated closure of businesses would continue, efforts were made to provide essential aid to all Americans. On March 27, 2020, the CARES Act was signed into law, offering numerous benefits. For our business, two key provisions were the Paycheck Protection Program (PPP) and enhanced unemployment benefits for those who had been laid off.

On April 3, 2020, I submitted ten PPP loan applications to Adirondack Trust Company on behalf of my various eligible businesses. Although many of my locations were outside ATC’s service area, having banked with them for 20 years, I never considered applying through a different bank.

On April 14, 2020, I received the PPP loan proceeds for all of my businesses. Each entity received a different amount based on its historical payroll expenses and employee count. The total sum of all the proceeds was $1,979,600.00. All funds were deposited into segregated accounts for each entity respectively.

During this time, New York State’s mandate keeping all buffets closed remained in effect, preventing us from reopening. As a result, we had not utilized any of the PPP funds.

In response to a text message received on September 23, 2020, a roughly 90-minute meeting with the majority of Adirondack Trust Company’s senior management team was had to discuss my future reopening plans as well as the current status of my assets and liabilities. In addition to the PPP loans, there was approximately two million dollars in other outstanding debt with Adirondack Trust Company. It was agreed that we would reconvene in one week.

As a follow-up to the initial meeting, Edward Connell, Michael O’Connell, Michael Murray, Edward Hart, Niral Patel, and Justin Heller (Patel’s attorney) reconvened. The purpose of the meeting was to brief Justin, who was meeting the ATC team for the first time, on the discussion from 9/24/20. The bank reviewed its questions and reaffirmed its view of my family as “partners.” It was agreed that the bank would seek clarification from the SBA and that we would reconvene in a week. There was no mention of loan defaults, fraud, or misuse.

As a follow-up to the initial meeting, Edward Connell, Michael O’Connell, Michael Murray, Edward Hart, Niral Patel, and Justin Heller (Patel’s attorney) reconvened. The meeting was primarily led by Edward Connell, ATC’s in-house counsel. He references recent discussions with the SBA and confirmed that no fraud had been uncovered—marking the first time the word “fraud” was mentioned in any conversation. Connell then outlined a series of expectations the bank had for Niral Patel, threatening that failure to comply would result in a lawsuit. This felt like a mob-style shakedown: “If you don’t do this, we’ll break your legs.”

Immediately after the call, I informed my attorney, Justin Heller, that I was displeased with the conduct of Adirondack Trust Company, particularly the mention of fraud and the threats made during the conversation. Within hours, Justin emailed Edward Connell, seeking clarification on the bank’s assumptions and expectations. However, the bank did not respond to his email.

Unbeknownst to me or Justin Heller, as revealed by the bank’s privilege log, a flurry of emails were hastily exchanged over Columbus Day Weekend between senior management and board officials of The Adirondack Trust Company, and several attorneys from Cullen & Dykman LLP. The attorneys involved were Christopher Buckey, Nicholas Faso, and Timothy Chorba. Over the Columbus Day holiday weekend.

At 3:14 p.m. on Columbus Day, The Adirondack Trust Company officially initiated its lawsuit by filing a VERIFIED Complaint with the Saratoga County Clerk. However, this fact would remain unknown for a few days. At 3:45 p.m., after the lawsuit had been filed, Edward emailed Justin stating, “I am concerned that your email signifies the initiation of a legal maneuver to further divert the PPP funds so that these funds cannot be used to repay the PPP loans. Given ATC’s obligations to the SBA, ATC must take immediate action to safeguard those funds. Accordingly, I have instructed our attorneys to proceed with legal action to secure these funds as soon as possible.“

This response raises important questions: How does an email requesting clarification signify a ‘legal maneuver’ and how could I divert funds that had been frozen three weeks earlier?