Judge sanctions BancorpSouth for withholding documents in Gladney case

BancorpSouth is facing tough sanctions from the 19th Judicial District Court for failing to turn over during the discovery process a computer disk containing some 500,000 pages of documents sought by the attorney for Windy Gladney in the developer’s long-running lawsuit against the bank. In a hearing late Monday, Judge William Morvant granted Gladney’s motion for sanctions against the bank for withholding the documents, which include emails that may contain information about the loans that are at issue in the case. Details of the ruling have not yet been entered into the court record. Attorneys for BancorpSouth did not return calls for comment in time for publication, and Gladney’s lawyer declined to comment until after the ruling has been made public. However, Morvant’s decision is clearly a victory for Gladney and his partnership, Kleinpeter Trace. Gladney and development firm Kleinpeter Trace are being sued by the bank for defaulting on some $2 million in construction loans. He has countersued, arguing that the bank defrauded him and conspired with his former partner in Kleinpeter Trace, Jim Tanner, by allowing Tanner to use Kleinpeter Trace funds for his own personal gain. To read more on the lawsuit, the subject of a Business Report cover story in October, click here. —Stephanie Riegel