FYI.

This story is over 5 years old.

This Barbecue Joint Says a Racist Bank Intentionally Destroyed Their Business

The restaurant owners claim Mercantile Bank purposefully sought out black business owners to give them loans, only to call those loans in for no reason at all—thereby destroying several minority-owned businesses.
Photo via Flickr user Robert S. Donovan

An award-winning barbecue restaurant in Grand Rapids, Michigan brought a lawsuit against a local bank this week. The restaurant owners claim Mercantile Bank purposefully sought out black business owners to give them loans, only to call those loans in for no reason at all—thereby destroying several minority-owned businesses.

Sandmann's, the barbecue joint that is now in bankruptcy, says Mercantile Bank evidently decided to get out of doing business with people of color entirely. The lawsuit, brought by the restaurant's bankruptcy trustee, has joined at least eight other lawsuits filed against Mercantile recently in federal court in Grand Rapids.

Advertisement

Randall Sandifer and his wife, Ursula Mann-Sandifer, say they were happily offered a 20-year, $330,000 construction loan to renovate their restaurant back in 2004 by Mercantile Bank.

But suddenly, in December 2012, the bank accelerated the outstanding payments on the loan and said the restaurant owed them $326,362.22 immediately. The restaurateurs said they were up to date on payments and, although a few payments had been late, they were never deemed delinquent.

Mercantile foreclosed and the well-liked barbecue joint was forced to close.

Attorney Derek Witte, who represents the plaintiffs, says that the calling off of the loan and the subsequent foreclosure were part of Mercantile's plan to purge loans to black-owned businesses: "Mercantile called the Plaintiffs' debts as part of its 'concerted' effort to rid itself of black business borrowers."

To make matters worse, the lawyers say, Mercantile aggressively sought out minority-owned businesses to give out loans to, and then reversed track. Back in 2000, the bank put up billboards and increased advertising and one-on-one meetings with black business owners. But ten years or so later, they had evidently reconsidered that strategy.

READ: This NY Pizzeria Is Facing a Huge Backlash for Their Racist-Sounding Pizza

The lawsuit alleges as follows: "What makes Mercantile's discriminatory 'concerted effort' all the more egregious is that, in many cases, Mercantile pushed these loans on many of the minority businesses to begin with, causing them to rely on the financing. Then, the bank aggressively yanked the loans back—leaving the borrowers and their businesses in far worse shape than if they had never created a relationship with Mercantile at all."

The lawyers for the black-owned businesses say that white-owned businesses were not treated accordingly. They say the bank was happy to work with white loan holders, even if those owners were struggling to pay their debts. Attorney Jordan Hoyer said, "Mercantile aggressively called the loans on most, if not all, of the minority owned businesses it had recently targeted." Hoyer says the bank "purged virtually all of its black business clients."

In addition to Sandmann's barbecue establishment, other plaintiffs include a beauty salon, a contractor, a shoe store, and several real-estate businesses.

Sandmann's lawsuit says that the bank "discriminated against Plaintiffs because of their race by using subterfuge and pretext to get Plaintiffs to pay cash penalties and/or provide additional security for existing debts when the bank simultaneously planned to terminate its banking relationship with Plaintiffs, all without taking the same steps with substantially similarly situated white business borrowers."

The lawsuits will likely take many months if not years to wend their way through the federal courts, so it may be quite some time before we learn whether justice has been served in the barbecue pits as well as by the gavel.