FAYETTEVILLE — Testimony in a hearing requested by a creditor of Fayetteville real estate broker John David Lindsey on Tuesday focused on the accuracy of financial documents submitted to the company for the lease of $2 million in equipment in April 2008.
Lindsey filed for Chapter 7 personal bankruptcy liquidation in February 2010, claiming $170 million in debt. Chapter 7 bankruptcy allows for the sale of assets to satisfy creditors.
Trans Lease Inc., a Denver-based commercial equipment leasing company, challenged the dischargeability of Lindsey’s bankruptcy petitionon June 26, 2010, by filing the proceeding in U.S. Bankruptcy Court for the Western District of Arkansas.
A Lindsey owned business entity, JDL Leasing LLC, contracted with Trans Lease to lease 18 dump trucks worth about $2 million. At the time of his bankruptcy, Lindsey owed Trans Lease $554,215.83 after the trucks were seizedand sold for nonpayment, the complaint stated.
Trans Lease is claiming that Lindsey overstated income, understated debt and generally misrepresented his financial condition on applications for the lease.
Lindsey spent Tuesday morning on the stand before Federal Judge Ben Barry testifying to the validity of thefinancial documents he said were filed on his behalf without his review at the time.
Most questions to Lindsey focused on some $21 million worth of loans made to him by his father, James E. Lindsey, or by entities controlled by James Lindsey.
James Lindsey is a University of Arkansas board memberand a former Arkansas Razorback Football player who went on to play for the Minnesota Vikings. He owns Lindsey & Associates, a Fayetteville real estate company, and several other companies involved in construction, real estate management and development.
The questions were about how those loans were classified on financial statements, as income or as loans - which could be classified as a liability.
Brian Smith, a vice president of operations and credit for Trans Lease, testified Tuesday afternoon about how Trans Lease conducts its credit checks and clears applications for leases.
Judge Barry will consider the testimony along with exhibits and supporting evidence before making a decision on Trans Lease’s claims at a later date.
Another adversarial challenge to Lindsey’s dischargeability filed by Bank of Fayetteville in June 2010 was closed in December when both sides agreed to dismiss the complaint, according to a court order filed by Barry on Dec. 8.
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Business, Pages 21 on 02/23/2011