(Valley News Live) – A bank is suing Dr. Khaled Rabadi of Grand Forks, alleging he owes millions of dollars as a guarantor on loans to companies tied to him. The lawsuit moved to bankruptcy court Monday, more than two weeks after those companies filed for Chapter 11 bankruptcy.
First Western Bank & Trust filed the lawsuit in Grand Forks County District Court. Rabadi filed a notice of removal Monday, moving the case to U.S. Bankruptcy Court, according to court records. He also asked for more time to respond to the bank’s motion for summary judgment. Judge Shon Hastings granted the request in a text order Monday, giving Rabadi until Nov. 30.
Summary judgment is a request for a judge to decide a case without a trial.
What the bank alleges
First Western’s complaint says Rabadi signed commercial guaranties, which are personal promises to repay loans made to three companies: Kidney and Hypertension Center, PLC; KDJ Investment Group, LLC; and KDJ Properties, LLC.
According to the complaint, the loans are in default. It puts the total owed at $7.86 million as of April 6, 2026, plus late fees, interest and unpaid property taxes.
In a brief dated Oct. 1, the bank argues there is no genuine dispute over the key facts. It asks the court to enter judgment against Rabadi for the full amount owed, plus interest, attorneys’ fees and costs. The brief lists balances on six loans as of Aug. 31. The brief does not state a combined total.
According to the brief, the companies missed loan payments beginning in July 2025, did not make a final payment due Dec. 25, 2025, on one loan, and did not pay property taxes when due. It describes the guaranties as unlimited and unconditional.
Rabadi’s response
Rabadi filed an answer May 15 denying liability. In it, he said the loan documents “speak for themselves.” He also listed defenses, including estoppel or waiver, unclean hands, and accord and satisfaction. On one of the guaranties, he said the clinic company, not he, is the guarantor.
The bank’s brief says the answer does not dispute that the debt exists or that the guaranties were signed, and does not include facts supporting the defenses.
Link to the bankruptcy filings
As VNL reported Oct. 19, seven affiliated entities filed Chapter 11 petitions Oct. 16. They include all three companies the bank’s complaint names as borrowers. The petitions list Rabadi as the authorized representative of each entity.
On VNL’s Facebook post for that story, Rabadi said the clinic and affiliated entities would remain open and continue to operate as usual.
Other cases
According to the complaint, First Western also filed a foreclosure case Jan. 19 in Grand Forks County District Court. It names the three companies, a fourth company called Washington Properties, LLC, and Rabadi as defendants. Court records VNL reviewed do not show the status of that case.
The allegations in the bank’s filings are claims and have not been proven in court. Rabadi has denied liability in his answer.
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