Ex-Baltimore mayor Stephanie Rawlings-Blake sued over $2M loan

A lawsuit filed Wednesday by an Indiana-based bank against former Baltimore Mayor Stephanie Rawlings-Blake seeks repayment on a $2 million commercial loan.

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Old National Bank, which merged with Capstar Bank in April last year, has filed a lawsuit in the U.S. District Court for Maryland for an outstanding loan balance, plus interest and late fees, in the amount of $2,109,114. The loan, issued on Nov. 8, 2023, was provided to Gulf Coast Technology Corporation, with Rawlings-Blake signing as a guarantor.

Rawlings-Blake, who served as Baltimore’s mayor from 2010 to 2016, signed an “unconditional guarantee” on the same day the loan was issued, ensuring that she would repay the loan on behalf of the borrower’s failure to repay the loan, according to the complaint.

Loan documents show Rawlings-Blake is named as president of Buy MBE. According to its website, the company is a majority minority-owned and controlled company that helps local and midsized businesses connect with Fortune 500 buyers through a “unified” procurement platform. The company also highlights Rawlings-Blake’s leadership experience as a past Baltimore mayor.

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Both Buy MBE and Gulf Coast Technology Corporation are the two companies claimed to have received the funds from the loan.

“The defendant absolutely, unconditionally and irrevocably guarantees repayment of the note pursuant to a U.S. Small Business Administration Unconditional Guarantee dated November 8, 2023, from the defendant in favor of the lender, as successor to Capstar Bank,” the bank said in its lawsuit.

A U.S. Small Business Administration Note, a document listed as evidence in the complaint supporting the loan, shows Gulf Coast Technology Corporation agreeing to repay the loan in monthly installments of $28,000 at a 3% interest rate, set to mature in 10 years.

According to the lawsuit, initial payments on the loan were made, but stopped in May 2023. The loan defaulted for nonpayment beginning in July.

Despite two formal demand letters sent by bank lenders on Nov. 25 and Dec. 6, borrowers, Gulf Coast Technology Corporation and Rawlings-Blake have not made payments, according to the complaint.

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As of Jan. 7, the total amount owed under the loan and the guarantee was calculated at $2,109,114, including $1,953,692 in principal, $145,575 in accrued interest and $9,846 in late fees. The loan’s interest continues to accrue daily at a rate of $562.

Loan records show Buy MBE and Gulf Coast Technology Corporation both share a Baltimore and Baton Rouge address. Both companies are also linked to Kevin Pomerleau, chief operating officer of Gulf Coast Technology Corporation, who did not respond to requests for comment via phone or email.

According to LinkedIn, Rawlings-Blake, does not list either company on her profile. Her professional page shows she runs a consultancy group, SRB Associates, which was forfeited in 2019 for failing to file necessary forms, business records show.

Rawlings-Blake did not respond to attempts for comment.

When Rawlings-Blake assumed the role of mayor in 2010, after former mayor Sheila Dixon left office amid scandal, she drew praise for a smooth transition. However, in her last few months as mayor in 2016, Rawlings-Blake faced criticism for her response to the unrest after Freddie Gray’s death and the city’s rapidly rising murder rate.

She also served as spokeswoman for rapper Travis Scott, previously headed the United States Conference of Mayors, served as secretary of the Democratic National Committee and as executive director for the National Basketball Players Association Foundation.