St. Charles Savings & Loan Ass'n v. Estate of Sundberg

This action was brought by the Small Business Administration (SBA) to recover the $75,000 proceeds of a foreclosure sale which were paid to the widow of an SBA-guaranteed borrower instead of to the United States. Following the entry of an order for foreclosure and the denials of the United States’ petition for a turnover order and motion for reconsideration, the United States appealed.

In 1975 a $400,000 SBA-guaranteed loan was made by the Aurora National Bank (bank) to K & E Industries, Inc. (K & E Industries). This loan was personally guaranteed by Mr. Walter Sundberg (who was the president…