William Lazenby, Bank of the Ozarks Reach Settlement

by Susannah Patton  on Tuesday, Oct. 6, 2009 10:08 am  

A settlement was reached last week in the lawsuit filed by northwest Arkansas developers William Lazenby and Donel Heckathorn against Bank of the Ozarks Inc. of Little Rock.

Lazenby and Heckathorn filed a suit against the bank on Aug. 3, claiming they'd suffered damages that could be in excess of $160 million.

The suit claimed that Bank of the Ozarks, along with Chairman and CEO George Gleason and board member James Matthews, fraudulently induced the plaintiffs to enter into a loan agreement for the refinancing and construction of the Rainbow Junction project, a 28-lot commercial subdivision in Bentonville.

The settlement, reached Sept. 29, resulted in Lazenby and Heckathorn paying cash equal to the estimated value of one piece of collateral and signing over Bank of the Ozarks all remaining collateral securing the related loans. They also dropped all other claims against BOZ and the other defendants. In return, Bank of the Ozarks agreed to release all claims - including any claim for the difference between the value of the collateral and the loan balance - against Lazenby and Heckathorn.

Lazenby could not be reached for comment Tuesday morning.

"We are pleased to have this matter resolved and to have title to our collateral," Gleason said in a prepared statement. "This puts us in a position to develop and implement an effective plan for the orderly sale of these properties without the delays that would result from continued litigation.

"We agreed to forego our claim for a deficiency judgment against the borrowers and guarantors, which we concluded was in our Company's best interest based on our belief that any potential recovery from a deficiency judgment would not significantly exceed, and might even be less than, the costs of obtaining and collecting such deficiency judgment."



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