Scooter Stuart's Tainted Assets Draw More Fire

by George Waldon  on Monday, Sep. 1, 2014 12:00 am  

Ownership of the 14711 Cantrell Road branch has joined the disputes surrounding Scooter Stuart. | (Photo by Jason Burt)

In one of the state court cases, One Bank is suing to take title of a west Little Rock branch that it claims was bought from Stuart in 1994 but wasn’t formerly transferred to the bank.

Richard Torti, executor of Stuart’s estate and trustee of the Stuart Family Trust, added a new federal lawsuit to the mix. Torti sued Debra Hoag, who is a former trustee of the Stuart Family Trust, and John Hancock Life Insurance Co. of Boston, for which Hoag was an agent.

“This thing has got a lot of moving parts, and everyone is jockeying for position,” Torti said. “I feel like I’m in the middle of a tornado, and as long as I don’t move too far I’ll be okay.”

The July 28 complaint alleges that Hoag and John Hancock mishandled the family trust’s prime asset: a $20 million life insurance policy on Stuart. Also named in the suit is Gentry Partners, where Hoag is president.

The suit claims that Hoag as trustee wrongly borrowed $1.7 million against the policy in June 2011 and implies the debt was incurred at the request of Stuart, although he didn’t have legal authority to do so.

According to the complaint, the check was made payable to the Stuart Family Trust, which was set up for the benefit of Stuart’s wife, Tommye, and their two grown children.

The $1.7 million check from John Hancock was sent by federal express to Scooter Stuart. He didn’t deposit the money in the trust and instead endorsed the check and used the funds for purposes outside the trust.

John Hancock shouldn’t have made payment on the check because Stuart didn’t have the authority to endorse it, the lawsuit claims.

In the eye of the legal storm is $14.7 million remaining from the payout of that policy following Stuart’s death. That money is the biggest single asset that the government has seized.

Increased litigation count notwithstanding, Stuart’s OCC-approved replacement at One Bank believes a resolution isn’t far down the road.

“I do think there will be a global settlement by the end of the year,” said Jerry Pavlas, CEO of the bank since Oct. 25, 2012.

The $375 million-asset lender got its first good financial news in a long while. One Bank recorded a $1.2 million year-to-date profit on its June 30 call report, the first black ink in two years.

 

 

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