LITTLE ROCK — Metropolitan National Bank and representatives of the Bob L. Gaddy Trust agreed to a consent judgment in a $27 million lawsuit filed by the bank on Sept. 22, leaving the lender in possession of pledged properties and an additional $2 million owed by the estate.
The consent judgment was filed in Washington County Circuit Court Friday.
Metropolitan National Bank filed the lawsuit seeking more than $27 million from the estate of Bob L. Gaddy for nonpayment of four loans, plus court costs and attorneys' fees.
Gaddy, a Fayetteville businessman and philanthropist, died Sept. 21, 2008.
The lawsuit says the loans were executed between 2004 and early 2008 and were modified several times.
Named as defendants in the suit were Jeff L. Gaddy and Linda A. Gaddy, representatives and trustees of the Bob L. Gaddy Estate and Bob L. Gaddy Trust; Gaddy Investment Co.; Gaddy Properties LLC; and Vestamerica Inc., a real estate firm incorporated in Colorado but with its primary place of business in Washington County.
The estate signed over the properties securing the four loans to the bank in payment and still owes Metropolitan National Bank $2 million, the consent judgment stated.
"Bob Gaddy was a fine and well-respected man, and his untimely death was very tragic. Metropolitan National Bank worked closely with his family to reach an amicable settlement regarding the loans due by his estate," said Susan F. Smith, the bank's senior executive vice president and chief operational officer, said in an e-mailed statement Monday.
Fayetteville attorney Gregory Jones, who represents the Gaddy parties, was out of his office Monday and unavailable to answer questions, a receptionist said.
In late July, Metropolitan reported a $32.5 million loss for the second quarter, writing off $33 million in loans mostly in Northwest Arkansas. It was the third losing quarter in a row forthe lender.
The bank has been actively pursuing overdue loans.
Metropolitan National Bank filed a foreclosure action Aug. 3 against Ruskin Heights, a Fayetteville subdivision on Mission Boulevard, and several investors who guaranteed portions of the $8.3 million debt.
The guarantors include local investors Dirk Van Veen, Edward Davis and Carlen Hooker; three Memphis investors, William Brown, J. Kevin Adams and Edward A. Labry III; and Texas investor John Brittingham.
The bank is seeking judgment for past-due principal and interest of more than $8.7 million plus attorney's fees. The outstanding debt is accruing interest of almost $1,900 each day, according to the lawsuit.
Fayetteville developer Gary Combs and Combs' Lovers Lane LLC are the target of a Metropolitan National Bank foreclosure lawsuit filed Aug.3 seeking to collect a $2.9 million loan.
The debt is secured by an 11,000-square-foot house at 8 E. Lovers Lane in Fayetteville. The property includes about 7.8 acres that remain after Combs recently sold a small portion of the lot.
Combs filed a lawsuit in Benton County against the bank in early July claiming the bank stopped funding a project even though the loan was not in default.
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Business, Pages 19, 24 on 09/29/2009