Nov. 20--A pair of Knoxville developers have been sued in connection with a struggling Pigeon Forge condo project and an allegation of more than $13 million in unpaid debts.

Earlier this month, Alabama-based Nexity Bank filed a complaint in Knox County Chancery Court against Ward Whelchel and Efthimios Mike Dionas. The dispute is connected to the Water Resort at Pigeon Forge, a four-building condo complex located just off of the Parkway next to the Country Tonite Theatre.

A trustee for Nexity Bank had scheduled a foreclosure auction last month -- a sale that was to include dozens of unsold condos -- but the auction was forestalled after the partnership that owned the property filed for bankruptcy protection.

In Nexity's Knox County complaint, the bank alleged that it made an $18.1 million loan to the partnership, and that Whelchel, Dionas and a consulting company each guaranteed payment of the note. The suit alleges that the partnership defaulted in its payments in July, and that as of Nov. 5 interest on the principal was accruing at the rate of more than $2,223 a day.

Dionas and Whelchel could not be reached for comment.

The developers are wrestling with legal issues on multiple fronts. Both men recently were charged by authorities in Florida with a felony count of contracting without a license during a state of emergency.

In addition, creditors of Dionas Whelchel Construction last month served the company with an involuntary petition in U.S. Bankruptcy Court. The petitioning creditors -- electrical contractor Advent Electric, materials supplier Tindell's, and mechanical contractor J & F Mechanical -- listed claims of more than $436,000.

Based in Birmingham, Nexity Financial Corp. -- the parent company of Nexity Bank -- lost more than $5.8 million through the end of September, according to its most recent quarterly report.

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