The city of Port Arthur has filed suit against the company that it claims failed to repay a loan and failed to fulfill the obligations of a grant.

Section 4A Economic Development Corporation of Port Arthur claims it loaned $40,000 to defendant Hernandez & Solis Inc. It also loaned Hernandez & Solis $60,000 in the form of a conditional grant, according to the suit.

The defendant, a food supplier in East Texas and Louisiana, makes Don Elias tortillas at its facility in Port Arthur.

Hernandez & Solis were expected to repay the grant if they did not meet the conditions required of it, according to the complaint filed Aug. 20 in Jefferson County District Court.

Since then, Hernandez & Solis have made two payments worth $1,482.36 toward the $40,000, the suit states. They have also failed to meet the requirements of the grant and have made $6,109.30 in payments toward the $60,000 grant, the complaint says. However, in August 2012, Hernandez & Solis stopped making their monthly payments, the city claims.

“Defendant’s default has not been cured, defendant has materially breached the Economic Incentive Contract and Loan Agreement and promissory notes, and the entire principal balance on the loans have become due and payable pursuant to the terms of the Economic Incentive Contract and Loan Agreement and promissory note, in an amount within the court’s jurisdiction ($92,355.73), not including costs of this suit, and attorney’s fees,” the suit states.

In its complaint, the city of Port Arthur alleges breach of contract.

In addition to the money it claims it is owed, the city is seeking interest at 18 percent,  plus post-judgment interest, attorney’s fees, costs and other relief the court deems just.

Guy N. Goodson and Kate Kalkbrenner Leverett of Germer PLLC in Beaumont will be representing it.

Judge Milton Shuffield, 136th District Court, has been assigned to the case.

Case No. D194-648

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