Houston G.O.P. Chief Faces Lawsuit Over Hedge Fund Loan

Jun 26 2012 | 11:14am ET

A Houston political heavyweight is fighting a collection lawsuit stemming from a six-year-old loan from a hedge fund.

Jared Woodfill, a plaintiffs' lawyer and chairman of the Harris County Republican Party, and his law firm, Woodfill & Pressler, borrowed $5 million from hedge fund Gerova Asset Backed Holdings in 2006. Gerova went under in 2010, the year that Woodfill allegedly defaulted on the loan.

But Woodfill is still not out of the woods. He and his firm have been sued by a collections agency, LFR Collections, which is seeking nearly $30 million.

Woodfill, who took the loan to fund his class-action litigation against BNSF Railway, has denied any wrongdoing, saying the size of the loan never grew as large as LFR alleges and that his firm never defaulted on the loan.

But Woodfill, a practitioner of a legal art reviled in right-wing circles, seemed more concerned with his G.O.P. position than with his legal headache.

"This is a business dispute," he told the Houston Chronicle. "This type of loan is consistent with free-market principles."

Woodfill added that a settlement is possible within just days.

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