DATE: Saturday, November 15, 1997           TAG: 9711150353

SECTION: LOCAL                   PAGE: B3   EDITION: FINAL 

SOURCE: BY MARC DAVIS, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   68 lines

R.G. MOORE IS SUING SIGNET BANK OVER SALE OF LOANS AT DISCOUNT

For 20 years, they were fast friends and partners: R.G. Moore, the biggest home developer in Hampton Roads, and Signet Bank, one of Moore's biggest financial backers.

Now they aren't talking, and Moore is suing Signet for $7.6 million.

In a lawsuit filed last week in Circuit Court, Moore says the bank did not live up to a promise to ``always work with'' him. He says the bank sold $17 million worth of his townhouse loans behind his back in 1995 to a stranger at deep discount, without the courtesy of a phone call.

He says the deal cost him $7.1 million.

``Signet failed to follow the rules of its own industry,'' said Moore's attorney, Douglas E. Kahle. ``They owed him at least a phone call.''

Signet declined to comment Friday. A spokesman in Richmond said the bank does not discuss pending litigation.

For Moore, this is the latest in a string of legal disputes dating to 1990. It is the first in which Moore has attacked his own bank for allegedly dealing in bad faith.

Moore, who will turn 69 next month, has long been a powerhouse in the local real estate industry. He has built more than 14,000 homes and developed more than 19,000 housing lots, mostly in Virginia Beach in the booming 1980s.

Moore fell on hard times around 1990, when housing sales started to slump.

That year, a group led by Moore sold most of the huge 1,178-acre Kiln Creek project in Newport News for $39 million. The group owed a huge debt on the land.

In 1991, Moore lost to foreclosure the Moore's Point condominium and marina development at Little Creek in Norfolk, along with assorted properties in Virginia Beach. He owed the bank about $38 million on them.

And in 1994, a group led by Moore lost the 1,200-acre Lake Ridge property in Virginia Beach to foreclosure. The group had defaulted on $35 million in loans. The city later bought the property for $9.5 million and recently built an amphitheater on part of the land.

Those setbacks involved two banks: First Union and NationsBank. Now Moore is suing Signet over a 1995 loan deal.

In his lawsuit, Moore says he had an ``extremely close relationship'' with Signet. He says Signet officials often called him one of the bank's best customers and, at one point, promised to ``always work with you.''

Signet held $17.7 million in loans on more than 300 Moore townhouses in Virginia Beach. In May 1995, Signet sold those loans at a discount to a New York investment company called ALI Inc.

Moore says Signet sold the loans for $10.6 million, or $7.1 million less than their face value. He says the bank never told him of the sale, by letter or phone call, and never asked if he wanted to buy the loans at the same discount.

Kahle said Moore could easily have gotten a commercial loan to buy those notes because the townhouses were worth more than $24 million.

Instead, ALI sued Moore last year in federal court to collect the $17 million in loans. In March of this year, ALI obtained a $17 million consent judgment against Moore.

The developer has worked out a private deal to pay ALI over several years by selling some of the townhouses.

Now, Moore wants Signet to pay him the $7.1 million difference in the loans, plus $500,000 in losses from a related deal.

Despite this lawsuit, Kahle said, Moore is actually in good financial shape. He said the ALI debt is Moore's last major obstacle.

``He is in the strongest position he's been in in years,'' Kahle said. ``I would think R.G.'s dark days are behind him.'' ILLUSTRATION: Photo

R.G. Moore says Signet sold some 300 of his townhouse loans for

$10.6 million, or $7.1 million less than their face value.

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