A Michigan judge has ruled that an unusual lawsuit alleging discrimination against a bank set up by members of the local Indian and east Asian business community by two of its Indian customers can proceed.

Oakland County Circuit Court Judge Denise Langford Morris on Wednesday ruled that the case against Novi-based Lotus Bancorp Inc. and three of its senior officers can proceed. She, however, denied a motion to establish it as a class-action lawsuit.

According to crainsdetroit.com, what makes the lawsuit unusual is that Lotus Bancorp, the holding company for Novi-based Lotus Bank, was founded in 2007 by members of the local Indian and east Asian business community. Most of those who invested in the bank were of Indian descent. Most of its board members are Indian.

And yet two of the bank’s Indian customers, Jasit Takhar and Anil Gupta, last March filed the case alleging discrimination when they fell behind on payments on a nearly $1.5 million loan from Lotus to buy a Travelodge motel in Jackson.

The lawsuit is based on a series of emails in 2010 and 2011 by the bank’s president, Neal Searle, and one of its executive vice presidents, Richard Bauer, who is also the bank’s CFO, crainsdetroit.com said.

Both are named as defendants, as is chief lending officer John Westerheide, the recipient of some of the emails, which contain highly derogatory comments about Indians.

One, by Bauer, as cited by the website, said that “the only good Indian is a dead Indian”, and another by him, when asked if he wanted free tickets for his Indian customers to attend a concert by an Indian singer, said he was “only interested if someone is going to detonate an incendiary device”.

A brief in the lawsuit quotes Searle as saying, in reference to others associated with the bank: “I don’t care what your Indian buddies told you, I make the decisions. I know how you Indians operate. You like to deal with someone you know in upper management, but this does not work like that. Do you understand English?”

Takhar and Gupta eventually got current on their loan after repeatedly being threatened with foreclosure, crainsdetroit.com reported.

Arguing to have the case dismissed, the Lotus bank’s lawyer Patrick McCarthy on Wednesday agreed that the emails by Searle and Bauer were wrong, but said they had nothing to do with the bank’s actions regarding Takhar and Gupta.

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