The developer behind a highly publicized plan to redevelop two historic Sterling buildings is now facing multiple lawsuits and foreclosure actions, including previous allegations that he diverted more than $4 million from a manufacturing company he co-owns.

The former Amcore Bank building at 302 First Ave. in Sterling is now in the hands of Central Bank Illinois following a commercial real estate foreclosure against a developer hoping to breathe life into the property.

Whiteside County Circuit Court Judge James Heuerman, on May 13, granted Central Bank Illinois early possession of the property after finding the mortgage in default and determining the bank had a reasonable probability of prevailing at a final hearing.

The foreclosure action was filed on April 7 against Rocky McGowan of Sterling and his companies – M5 Property Holdings, M5 Conveying Consultants, and M5 Industries – and his wife, Darcie McGowan.

Rocky McGowan owns M5 Property Holdings and manages and controls M5 Industries, a Rock Falls business that engages in engineering, manufacturing, tooling, steel fabrication, real estate ventures, contracting, investments, and related activities, according to court documents.

McGowan last year announced he had purchased two historic buildings on Sterling’s First Avenue in 2024, a $6 million investment that he had hoped would open in fall 2025. He said his company managed large-scale development and could do the work without relying on outside contractors.

But in a foreclosure filing this spring, a Central Bank Illinois representative said he had found construction had stopped at the site, leaving the property unsecured. The court determined the bank’s mortgage explicitly allows possession upon default. Central Bank Illinois will hold control of the property until a successful bidder takes ownership following a sheriff’s sale, according to court records.

The foreclosure is one of multiple legal actions filed since February against McGowan and his M5 Conveying Consultants, M5 Industries, M5 Property Holdings, and other defendants, including his wife.

That financial turmoil has also extended into Rotary Airlock, a manufacturing company that has a principal place of business at 1104 E. 17th St., Rock Falls.

Rotary Airlock was founded in 1995, according to its website, and engages in engineering, manufacturing, tooling, and steel fabrication. Founded by Chester Hilty, the business was purchased by five people in June 2021. They include Benjamin Hilty, Timothy Hilty, Matthew Hilty, Kyle Herren, and McGowan. McGowan received a two-sixths ownership stake while the others each received one-sixth, according to the court records.

Rotary Airlock’s allegations against McGowan

Rotary Airlock LLC filed a complaint against Rocky McGowan in Whiteside County Circuit Court on April 13. The company alleges McGowan exploited his control over the company’s finances to enrich himself at Rotary Airlock’s expense over more than two years.

[ Rock Falls company sues co-owner for $4.1M, alleging siphoned funds used for gambling, personal use ]

“Rocky’s conduct was willful, deliberate, and in conscious disregard of Rotary Airlock’s rights,” according to the complaint. “Rocky designed and executed a multiyear scheme in which he used company credit card accounts for personal expenses, systematically withdrew company cash for personal use, fabricated justifications to conceal those withdrawals, caused the company to take on unauthorized debt, and then funneled company funds to entities he personally owns and controls.”

McGowan exercised “authority and practical control” over the company’s bank accounts and financing operations, according to the complaint. The other owners allege he used that control to systematically divert company assets.

From January 2024 to February 2026, McGowan charged personal expenses to two company credit cards totaling $520,791, the complaint alleges. The charges included personal retail purchases, entertainment, and other personal expenses.

McGowan made three partial reimbursements totaling $245,203, leaving $275,588 in unreimbursed personal charges, according to the complaint. The other owners say they were never informed of these charges and never authorized them.

McGowan is also accused of withdrawing $946,805 in company cash for personal purposes between Jan. 1, 2024, and Feb. 27, 2026. The withdrawals paid for personal groceries, food delivery services, hotel stays, medical expenses, and casino cash advances, according to the complaint.

When questioned about the withdrawals, McGowan said they related to “internally constructed assets” he created for the company, according to the complaint. The company argues this explanation is false and says the withdrawals consisted of personal groceries, food delivery, hotel stays, and casino cash advances, which cannot constitute business assets for an industrial equipment manufacturer, according to the complaint.

The $946,805 in total cash withdrawals does not overlap with and is separate from the personal credit card charges, according to the lawsuit.

The complaint also alleges that McGowan entered Rotary Airlock into four financing transactions totaling $3,079,263 without disclosing them to the other owners or obtaining required authorization as required by the company’s operating agreement, according to the complaint.

The complaint then alleges McGowan transferred $2,953,249 in company funds across 11 transfers to M5 Industries and M5 Property Holdings between November 2025 and January 2026.

The complaint alleges that the transfers directly injured Rotary Airlock by depleting its cash, increasing its debt burden, impairing its working capital, and diverting company assets to non-company purposes.

The M5 transfers do not overlap with the credit card charges or the cash withdrawals described, the complaint states.

Rotary Airlock and the co-owners are suing for conversion, fraud, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, aiding and abetting fraud, accounting, and imposition of a constructive trust.

The complaint seeks compensatory damages totaling at least $4,175,643, plus damages from the unauthorized financing obligations and punitive damages, prejudgment interest, attorneys’ fees, and a constructive trust over all funds traceable to the unauthorized transfers.

Bank files foreclosure complaint on Rotary Airlock-owned parcel

Then, separately, Sterling Federal Bank on May 14 filed a foreclosure complaint against M5 Conveying Consultants, M5 Industries, and multiple other defendants, including Rotary Airlock’s co-owners, over a $165,000 loan that the banks say went into default.

Sterling Federal Bank’s complaint targets property at 407 E. Seventh St. in Rock Falls. The bank alleges that M5 Conveying Consultants failed to make required principal and interest payments on a promissory note signed on April 5, 2023.

As of April 13, the bank says M5 and its guarantors owe $165,207.25, including $161,331.12 in principal, $3,466.38 in interest, and $311.55 in late charges. Interest continues to accrue at $43.69 per day.

The mortgage was recorded Oct. 27, 2023, with Rocky F. McGowan listed as mortgagor. Both McGowan and his wife, Darcie McGowan, signed personal guaranties backing the loan, according to the foreclosure petition.

A case management conference for the civil lawsuit that Rotary Airlock and McGowan’s co-owners filed against him is set for 9 a.m. July 13 in Whiteside County Circuit Court.

Another case management conference is set for 9 a.m. July 16 in Whiteside County Circuit Court for the Sterling Federal Bank foreclosure complaint filed against M5, the McGowans, and the Rotary Airlock co-owners.