Northwest Arkansas candle company, bank agree on damages

FAYETTEVILLE -- A Northwest Arkansas candle company owes a bank $3.9 million for loans, interest and fees in a breach of contract case, the sides have agreed.

Bank of America sued JB Hanna company, Hanna's Candle Company and Kerzen Properties in federal court in November 2010, seeking to foreclose on three properties, claiming the companies failed to repay more than $16 million in business loans.

A jury found in favor of Hanna's but the 8th U.S. Circuit Court of Appeals subsequently found the jury's June 2012 verdict in U.S. District Court in Fayetteville went against evidence and sent the case back for further proceedings.

"The jury's conclusion that the Hanna parties did not breach is against the great weight of the evidence," the judges wrote in their opinion. "The parties entered into enforceable contracts. The bank satisfied its commitments thereunder. JB Hanna and Kerzen failed to fulfill their obligations under those contracts when JB Hanna did not pay the 2005 loan balance at its maturity in September 2010 and when Kerzen breached the financial-condition covenants. The bank was financially harmed."

The fact Hanna parties paid the bank $8.75 million in May 2012, well after the due date, didn't eliminate the breach of contract that arose from the failure to make timely payments on the JB Hanna loans, judges said. Payments on associated loan agreements were accelerated because of the defaults.

In August, a federal judge granted summary judgment in favor of Bank of America and earlier this week the sides filed a joint stipulation relating to what the bank is owed in compensatory damages in the case.

In addition to compensatory damages, the sides stipulated the bank can foreclose on Hanna-owned properties in Springdale and Westville, Okla., and an insurance settlement related to weather damage to one of the properties can be applied to the $3.9 million in damages. Attorney fees haven't been determined.

NW News on 11/05/2015

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