ROCK HILL, S.C. - A class-action suit has been filed against accountants, lawyers and lenders of a Pageland investment company being investigated by the state.

The Thaxton Group filed for bankruptcy last month, owing more than $120 million to about 3,800 investors. The suit filed Tuesday in Anderson County on behalf of two investors seeks to collect debt for anyone who bought securities from Thaxton or its affiliates.

"The South Carolina residents that I represent feel they should not have bought these notes if the company was not in a position to pay them back," said Rock Hill attorney Randall Hood. His firm McGowan and Hood helped file the suit.

The suit names as defendants Finova Capital Corp., Thaxton's largest lender; Charlotte law firm Moore and Van Allen; and the Raleigh, N.C., office of accounting firm, Cherry Bekaert and Holland. Officials with the companies dismissed the lawsuit's claims.

The Thaxton Group is not a defendant in the case because civil suits cannot be filed against companies in bankruptcy, Hood said.

The suit claims Finova pressured Thaxton into selling securities to help pay off its debt to the lending company, leaving Thaxton unable to repay money owed to investors.

Finova loaned money to Thaxton in the late 1990s to help pay for Thaxton's expansion, the lawsuit said. But when Finova filed for bankruptcy in 2001, it wanted to collect on its debts as quickly as possible, court papers said. Thaxton owes Finova about $110 million, according to bankruptcy court papers.

The lending company continued to pressure Thaxton even as "it became evident or should have become evident that there were problems with The Thaxton Group as an ongoing entity," the suit says.

Attorneys for Moore and Van Allen helped Thaxton sell notes to investors, but failed to monitor the financial condition of the investment company and were negligent in other areas, the suit claims.

The law firm said it is confident its attorneys can prove the claims wrong. "We believe our legal work fully complied with legal and professional standards," the firm said in a statement.

The suit also finds fault with Thaxton accountants, who it says gave financial statements that were misleading and "omitted salient facts." Cherry Bekaert & Holland plans to deny liability, said Paul Childress, an attorney for the Virginia-based accounting firm.

Thaxton stopped selling notes in September after revealing that the company showed a profit in recent financial statements when it should have showed a loss. The company reported a profit of $1.6 million for the first quarter, when it actually lost up to $200,000 in the first half of the year, the state attorney general's office has said.

Thaxton, founded in 1950 in Pageland, has more than 50 offices around the nation dealing with auto loans, auto insurance and investments. It has offices in Kershaw, Lancaster and Camden and its Tico subsidiary has five offices in the Pee Dee.

Information from: The Herald