County officials in Georgetown, South Carolina, allegedly made false statements when they tried to obtain letters of credit (L/Cs) associated with a local property development.

The officials are amongst several parties cited for misconduct in a lawsuit filed by The Reserves Development Corporation (RDC), the developers of a stalled residential community.

Infrastructure costs

The lawsuit alleges that Assistant County Attorney, Richard Berl, used his position to the advantage of his clients, including the buyers of a 30-lot portion of the 185-home development.

According to the suit, the buyers would have had to pay a share of the development's infrastructure costs.

Lost rights

However, after the sale to one company ended in foreclosure, the 30 lots were sold to another company.

In this process, RDC lost certain of its rights associated with the property, essentially those that entitled the developer to be compensated by buyers for infrastructure investments.

L/C allegations

The suit alleges that county officials intentionally made false statements about the developer's progress and breached contracts during a 2008 attempt to obtain L/Cs worth US$2.5 million.

The developer put up the L/Cs as a guarantee that infrastructure work would be completed.

Injunction

The developer initially obtained a court ruling that prevented Georgetown Country from drawing money from the L/Cs.

Subsequently, the county did draw on the L/Cs at their expiration date.

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