As he seeks election with the support of former Mayor Richard M. Daley, a Cook County judge is engaged in a legal battle, fighting in state and federal courtrooms to avoid repaying a bank loan for a French kitchenware store on Michigan Avenue.

Judge Daniel Patrick Duffy — the husband of Daley’s longtime City Hall chief of staff Sheila O’Grady — was facing a lawsuit over a $300,000 loan he personally guaranteed when the Illinois Supreme Court appointed him in April 2014 to fill a vacant seat on the Cook County bench, according to court records.

At the time, Duffy’s business owed more than $40,000 in state and federal employment taxes for the store’s employees, records show.

Now, as he continues his court battles over the loan, Duffy is hoping the Cook County Democratic Party will endorse him in August, giving him the political muscle that would guarantee his election next year to keep his seat on the bench.

Duffy has Daley’s support. The former mayor is honorary chairman of the judge’s campaign and helped host a fundraiser for him June 23 at a River North restaurant.

The dispute in the courts stems from Duffy’s ownership of Genevieve Lethu, a French kitchenware store — similar to Crate & Barrel — that operated for nearly six years in the Bloomingdale’s building at 900 N. Michigan Ave. across from the John Hancock Center.

Duffy was a practicing lawyer in Chicago when he acquired the rights to open the French retailer’s first store in North America, according to Peter B. Bensinger Sr., a friend and business partner who is also a former head of the U.S. Drug Enforcement Administration.

“Dan had a franchise from a French retail store that sold dishes, French cooking equipment,” Bensinger says. “I never had much to do with it. I never invested any money in it.”

The legal battle began more than two years ago in federal court, moved to circuit court and is now before a federal appeals court.

At one point, a federal judge accused Duffy of filing a “vexatious” lawsuit in an effort to dismiss the ongoing case before Duffy’s judicial colleagues in Cook County circuit court.

Duffy is asking the federal appeals court to rule that the state lawsuit is illegal because a federal judge had previously dismissed a similar suit. Such a ruling would mean Duffy wouldn’t have to repay the loan he got seven years ago from George Washington Savings Bank in Orland Park, which later was shut down by state regulators.

In court papers, the judge’s attorneys assert that FirstMerit Bank, which took over the shuttered bank’s assets and loans, has no legal authority to enforce the personal guarantee signed with George Washington. They also argue that the Federal Deposit Insurance Corporation already has covered the loss from the delinquent loan.

It’s the second time a bank has sued Duffy to collect on a personal guarantee for a loan for a financially troubled business. In 2009, Bank of America sued Duffy and his then-business partner Victor Reyes, a longtime Daley aide, trying to collect on a loan made to EBRO Foods. After a four-year battle in Cook County court and the Illinois Appellate Court, the case ended with an undisclosed out-of-court settlement on July 31, 2012, after EBRO Foods went bankrupt.

Duffy, 50, of Chicago, says he won’t publicly discuss his legal problems. Daley couldn’t be reached for comment.

Joseph Tybor, a spokesman for the Illinois Supreme Court, says: “The court was unaware of the background you mention. In the case of Mr. Duffy, the court sought and relied on the screening and recommendations of the Chicago Bar Association and the 11 bar groups in the Alliance of the Bar Associations, including the Chicago Council of Lawyers.”

Based on state and federal court records, here’s how Duffy’s court fight has played out:

December 2007 — Operating under the name Confidential French Enterprise LLC, Duffy opens the Genevieve Lethu store.

Sept. 29, 2008 — CFE Group gets a $300,000 loan from George Washington Savings Bank in Orland Park. Duffy and his partner, Michael Salem, each signs a personal guarantee, promising to repay the loan, which is due Oct. 1, 2015.

Feb. 19, 2010 — Illinois banking regulators shut down the George Washington bank, turning over its assets and loans to the FDIC, which turned those over to FirstMerit.

April 6, 2010 — The Internal Revenue Service files the first of four liens it will file naming CFE and Duffy, this one seeking $21,739.10 in employment taxes for the store’s workers.

Daniel P. Duffy Tax Lien — April 2010

“Judge Duffy tells me that he has retained a tax attorney to look into the matter,” says attorney Martin T. Burns, chairman of Duffy’s campaign fund. “Apparently, the liens relate to taxes owed by a business for which he served as ‘tax matters partner’ before he was appointed to the bench. He says the taxes are not owed by him personally and are not personal taxes. He also says paperwork has been filed with the IRS to correct the liens and remove his name.’

May 27, 2010 — The IRS files another lien, seeking $5,004.06. To date, this is the only IRS lien that has been paid.

July 20, 2010 — The IRS files a third lien, for $10,211.34.

Sept. 1, 2010 — FirstMerit decides the loan guaranteed by Duffy and Salem is delinquent.

Dec. 17, 2010 — In a separate case, the French company Argos SNC sues CFE and Duffy in Cook County court, accusing them of failing to pay a total of $65,021.59 owed for silverware, plates, glasses and other kitchen utensils. This suit went on for 30 months before it was apparently settled out of court.

Jan. 16, 2012 — The Illinois Department of Revenue files a lien naming CFE and Duffy, seeking $1,541 in employee withholding taxes. This lien has been paid.

Oct. 1, 2012 — FirstMerit demands nearly $320,000 from Duffy and Salem to pay off the loan’s outstanding balance, interest and late fees.

Oct. 10, 2012 — FirstMerit attorneys have a conference call with Duffy regarding an extension of the loan.

Nov. 29, 2012 — FirstMerit files a federal lawsuit in Chicago, seeking to collect the loan from CFE, Duffy and Salem.

Feb. 11, 2013 — The Illinois Department of Revenue files a lien naming CFE and Duffy, seeking $2,471.83 in employment taxes. Earlier this month, following Sun-Times inquires to Duffy’s campaign manager, these taxes were paid.

March 6, 2013 — On a motion from Duffy and Salem, U.S. District Judge Ruben Castillo dismisses the suit “without prejudice,” giving the bank the opportunity to refile the case. Castillo urges the parties to settle. FirstMerit withdraws the suit.

May 4, 2013 — The IRS files a fourth lien, seeking $6,911.02 in employment taxes.

May 6, 2013 — FirstMerit files a new lawsuit in Cook County circuit court seeking repayment from CFE, Duffy and Salem. All three have since filed counterclaims, arguing the bank has no legal standing to collect the loan, while also insisting the FDIC should be part of the suit. The case is ongoing.

June 6, 2013 — Genevieve Lethu closes.

Nov. 7, 2013 — Duffy, Salem and CFE sue FirstMerit in federal court, asking a judge to dismiss the county lawsuit, arguing that the dismissal of the federal case means the bank can’t file the case now in Cook County court.

March 24, 2014 — The Illinois Supreme Court appoints Duffy to the Cook County circuit court, replacing Judge Susan Ruscitti Grussel, who retired. Duffy’s appointment runs from April 3, 2014, to Dec. 5, 2016.

The Illinois Supreme Court previously appointed him to a review board that hears disciplinary cases against lawyers. He served on that panel for eight years.

April 7, 2014 — Duffy creates a campaign committee, which so far has raised $101,900, including $42,000 from Duffy himself. Many of the other contributions he’s gotten came from people with ties to the Daley administration.

Former Mayor Richard M. Daley, seen here in  May, chairs Judge Daniel P. Duffy's campaign. AP photo

Former Mayor Richard M. Daley, seen here in May, is honorary chairman of Judge Daniel P. Duffy’s campaign. AP photo

Duffy’s wife was Daley’s chief of staff beginning in December 2000. She left in May 2005 in the wake of the Hired Truck scandal, in which City Hall was paying politically connected business people $40 million a year for private dump trucks that were often paid to do nothing.

Duffy’s late father-in-law, Frank O’Grady, was vice president of La Preferida, a Mexican food company, and was a longtime supporter of Daley.

June 12, 2014 — U.S. District Judge William T. Hart dismisses Duffy’s lawsuit, calling it “an unreasonable and vexatious multiplication of proceedings already pending in state court.” Hart said it was “abundantly clear” that Judge Castillo never ruled on whether FirstMerit had the right to collect the delinquent loan. Duffy, Salem and CFE have appealed to the U.S. Seventh Court of Appeals, which is set to hear arguments Aug. 4.

Meanwhile, Cook County Circuit Judge James Flannery Jr. must decide whether to urge Chief Judge Timothy C. Evans to seek permission from the Illinois Supreme Court for a judge from another county to preside over FirstMerit Bank’s suit against CFE, Salem and Judge Duffy.