Greater Sacramento Bancorp chairman sued by two other banks

The chairman of Greater Sacramento Bancorp is being sued for foreclosure by two other banks.

Kip Skidmore, the non-executive chairman of Greater Sacramento's board of directors, was sued by Umpqua Bank and Bank of the West over two suburban housing projects for which he guaranteed loans.

Neither project involves Great- er Sacramento or its operating subsidiary, Bank of Sacramento.

In both cases, Skidmore personally guaranteed multimillion-dollar loans on behalf of a Sacramento developer named Sixells LLC. The lenders also sued Sixells and its principal, David Lonich. Sixells, which has been sued by various contractors and suppliers, is reportedly going out of business.

Skidmore is president of a Sacramento construction firm, Sierra National Construction. He has developed such projects as Riverbank Marina, a commercial complex off the Garden Highway in Sacramento.

He co-founded Greater Sacramento and its operating subsidiary, Bank of Sacramento, and owns 7 percent of Greater Sacramento's stock, which is traded on the over-the-counter market.

In an interview, Skidmore said the two foreclosure suits won't affect his chairmanship of Greater Sacramento.

"You're going to have all kinds of things going on in a business career," he said. "There's always going to be issues. As long as you deal with those issues straightforwardly and honestly, it doesn't compromise anything."

He added the lawsuits have given him a better sense of the real estate slump and its effect on banks. "It allows me to (have) some appreciation of the situation, of what developers and banks are both going through," he said.

William Martin, Greater Sacramento's chief executive, said Skidmore has the board's confidence.

"He's the victim of a very sour investment. He's trying to work through it," Martin said. "He's doing the very honorable thing, and it certainly doesn't put him in a bad light with our board."

Charles Elson, an expert on corporate governance at the University of Delaware, said the litigation shouldn't affect Skidmore's status as long as it doesn't affect the bank's operations.

"Does it hurt the bank? Is it a distraction to him? … If the answer is no, I guess he stays," Elson said.

Greater Sacramento, founded 10 years ago, is one of a handful of publicly traded bank corporations based in Sacramento. Like other banks, it's trying to deal with the effects of the housing slump and a softening economy. Its profits fell 7 percent last year but increased 5 percent, to $783,000, in the first quarter of this year.

According to the Umpqua suit, Sixells borrowed $10.35 million to build the Crest at Sierra Creek, a 48-unit townhome project that has been built in Antelope. Skidmore personally guaranteed $4.25 million of the loan, the suit said, and Sixells defaulted on the note with about $4.6 million left unpaid.

Skidmore said his guarantee applied only to the part of the loan that's been repaid. Umpqua's lawyer couldn't be reached for comment.

In the other case, Skidmore guaranteed a loan Bank of the West made to Sixells to build a single-family home project in Orangevale called Silvertip. Sixells defaulted, owing $3.3 million, the suit says.

Skidmore said he is negotiating with Bank of the West to complete the infrastructure phase of the Silvertip project, located on Greenback Lane.

The bank's lawyer, Mark White, said the bank had no comment. Lonich, the principal of Sixells, couldn't be reached for comment but told the Sacramento Business Journal in May that his company is going out of business.

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