WINFIELD – A company owned by Powerball winner Jack Whittaker has filed a lawsuit against already troubled former state Sen. Lisa Smith.

In the complaint, filed Monday in Putnam Circuit Court, Whittaker LLC says Smith and her companies Elite Health Care Inc. and Elite Professional Health Associates Inc. owe more than $1.7 million on a promissory note.

In the suit, Whittaker LLC says the two defendant companies signed the promissory note payable to Whittaker for $2.5 million on Oct. 26, 2004. It also was secured by stock pledge agreements executed on behalf of both companies. Security agreements also were entered, as were UCC financing statements.

Whittaker says the companies failed to make regular and timely payments and, thus, breached the terms and are in default.

The complaint notes that Whittaker sent several letters demanding information from the defendant companies through 2005.

In a Jan. 16, 2006, letter, the defendants were notified that the promissory note was in default and that Whittaker intended to assert its rights against them. The amount of debt to cure default, according to the letter, was more than $1.6 million. The letter also sought specific performance by each company in providing appropriate stock certificates and inventory information.

Two weeks later, an amended notice of right to cure default was delivered to the defendant companies demanding payment of $1,716,909.92 within 10 days to prevent default and termination of the note.

Whittaker says it did receive lists of accounts receivable and other personal property from the defendant companies, but it did not receive the duly executed stock certificates despite the repeated demands.

In an Aug. 6 letter, Whittaker notified the defendants that it would have a directors and shareholders meeting on Aug. 21 to cause the defendant companies to surrender shares of stock. The defendants failed to attend.

Whittaker LCC seeks the $1.7 million-plus balance due, plus accrued interest as well as an order directing the surrender of shares in Elite Health Care Inc. and Elite Professional Health Associates Inc., pre- and post-judgment interest, costs, attorney fees and other relief.

Last month, Smith was ordered to undergo treatment at a Federal Bureau of Prisons facility after being found incompetent to stand trial on charges of mail fraud, tax evasion and failure to pay about $1 million in employment taxes. She and her husband allegedly failed to pay employment taxes withheld from their employees' checks.

Smith, a Putnam County Republican who resigned from the state Senate in December 2004, is charged with 16 counts, including two counts of mail fraud, and faces up to 110 years in prison if convicted of all of those federal charges. She also is accused of lying on financial statements she filed during her 2002 campaign.

Her husband, Mark Smith, is charged with 14 counts of tax evasion and failure to pay employment taxes. He faces up to 70 years in prison if convicted.

In the Putnam Circuit Court case, Whittaker LLC is represented by Charleston attorney Norman T. Daniels Jr. The case has been assigned to Circuit Judge Ed Eagloski.

Putnam Circuit Court case number: 06-C-369

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