Bank sues Shilo Inns, owner over loans

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PORTLAND, Ore. (AP) -- A California bank has sued Shilo Inns and owner Mark Hemstreet, saying he and three of his inns defaulted on loans of $5.2 million in Seaside and Newberg and at the Rose Garden in Portland.

The federal court suit says Hemstreet also missed interest payments on a $5 million line of credit.

The Oregonian reported (http://bit.ly/Hz4Ub8 ) that California Bank & Trust asks for a receiver to take possession of the properties.

The company's general counsel, Wes Raborn, says Shilo is confident it can work out a solution with the bank.

Hemstreet founded Shilo Inns in 1974. In the 1990s, he was prominent in Oregon politics, providing financial backing for Republican legislative candidates and a ballot measure to limit property taxes.

Shilo currently lists 43 locations in 10 western states.

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Information from: The Oregonian, http://www.oregonlive.com