TAMPA — Mired in personal bankruptcy, Jerry D. Campbell needed a lifeline to reorganize his finances and to get out from under about $9 million in debt. A big loan was key to his plans. So he turned to a place many bankrupt individuals might think a lost cause:
It wasn't a lost cause for Campbell, 76. He got a commitment letter in September for a $1.4 million loan from Tampa-based HomeBancorp. But this wasn't just Campbell's local bank.
He is the CEO, chairman and president of HomeBancorp, holding company for HomeBanc, a community bank Campbell co-founded.
Campbell, in the end, did not get the loan, though the Sept. 14 commitment letter is filed with his bankruptcy case in Tampa federal court. The file does not make clear why the loan was not completed.
But Campbell's attorney, Al Gomez, said the bank ultimately decided to back away. Gomez, who noted he was not a lawyer on the case at the time, said he does not have specific information about the bank's motives.
"The bank decided it didn't make sense to do it," Gomez said. "Certain conditions didn't seem right."
Debra A. Hanses Novakoski, CEO of HomeBanc, declined to say why the loan was not provided, though she said it would have complied with any applicable federal regulations. Campbell declined to comment.
Insider loans to bank leaders are allowed by federal regulators if they are properly recorded, banking experts say.
But in an age of public mistrust of the financial sector in the wake of the excesses of Wall Street during the last decade, some say a bank's good reputation is best protected as tightly as the vault.
Ann Skeet, director of leadership ethics at the Markkula Center for Applied Ethics at Santa Clara University in California, said any reputable business seeks to avoid even the appearance of a conflict of interest.
"I would say it doesn't sound great," Skeet said of the loan. "But without knowing exactly why the bank choose not to make the loan — maybe they went through a process where they made the appropriate decision" ethically.
Certainly, nobody in the bankruptcy case has accused Campbell or his bank of wrongdoing.
Campbell's attorney said the loan commitment was proper. Campbell filed for bankruptcy protection in January 2016.
"I don't think it's that unusual when all parties are in agreement and when you have a debtor with the financial wherewithal to repay the loan," said Gomez. "This happens frequently. He's not the run-of-the-mill debtor."
Indeed, Campbell isn't. He earned $1.1 million from HomeBancorp in 2016 and $1.4 million in 2015, court records show, and he owns bank stock that he offered as collateral for the loan, along with other assets.
Campbell fell into financial straits after he and a business associate obtained a $4.8 million loan in 2009 to buy Michigan-based Pinnacle Race Track. The 320-acre track was abandoned in 2010, Campbell blaming the economic downturn for its demise.
Funds from Campbell's loan would have gone to creditors as part of a mediated settlement. "Without this financing, a consensual plan of reorganization cannot be obtained," said a motion by Campbell's attorneys.
A condition of HomeBanc's loan was that court approval be sought. It does not appear the court ever ruled on the loan. Now a second reorganization plan has been filed that is not dependent on a loan, Gomez said. A hearing on the plan is scheduled later this month.
The five-year loan would initially have had a 5 percent interest rate, or 1.5 percent above prime. After two years, that rate would go up to 2.5 percent above prime. The loan fee was $4,500.
The loan would have required some belt tightening by Campbell, restricting him to annual living expenses of $75,000.
Contact William R. Levesque at firstname.lastname@example.org. Follow @Times_Levesque.