LR Developer Clary Facing $17 Million In Defaults; Shackleford Crossings Not in Jeopardy

by Mark Hengel  on Monday, Jun. 15, 2009 12:00 am  

Shackleford Crossings shopping center in west Little Rock is being developed by Steve Clary?s Clary Development Corp. of Little Rock.

The developer behind the Shackleford Crossings retail development in west Little Rock has defaulted on more than $17 million in personal and commercial loans since July, and his creditors have gone to court to protect their interests.

None of Roger S. "Steve" Clary's defaulted loans lists Shackleford Crossings as collateral, although the personal loans are secured by future proceeds generated by the shopping center.

Clary, chairman and CEO of Clary Development Corp. of Little Rock, said last week that he is currently closing transactions that will allow him to make good on the debts. The transactions should finalize in about two weeks, Clary said. And he insisted the defaults would have no impact on the 80-acre-plus Shackleford Crossings. Shackleford Crossings appears to be in good standing on its loans.

Clary has not responded to collection suits filed against him in several jurisdictions. In two brief interviews last week, Clary said he had explained his financial situation to each of the creditors and to Shackleford Crossings' primary lender, Marshall & Ilsley Bank of Milwaukee. (To view a timeline of Clary's borrowing, click here.)

"We had a number of debts coming due and a number of transactions coming to a close," he said. "In the meantime, the debts came due" before the transactions finalized.
"They are good people who lent the money, and they took the action that any lender would take," he added.

Clary would not disclose what transactions he is currently pursuing to repay the debts, which include:

  • $2.97 million in personal loans and interest from four private parties;
  • $3.8 million that Banc of America Leasing & Capital LLC has filed suit to collect, money that was lent to Clary and his wife, Cynthia, to purchase six buses;
  • $1.35 million that was borrowed from Regions Bank in July and on which Clary defaulted only three months later; and
  • $9.2 million that BancFirst of Oklahoma City lent to Clary's CZ - I-40 Development LLC of Little Rock to buy land for a shopping center in Oklahoma.

Judges issued default judgments against Clary in the Banc of America and Regions cases after he failed to respond. In the BancFirst case, a judge issued a summary judgment without receiving a response from Clary.

The Investors

On May 27, four parties that lent Clary nearly $2.85 million filed suit in Pulaski County Circuit Court. Clary has not responded to the case. The four are seeking $2.97 million for the loans plus interest, according to the complaint.

"We have and we had a number of businesses that were starting up that required capital to be started. They had large future potential. And simply put that was the purpose of" receiving the loans, Clary said.

According to the complaint, Clary borrowed:

  • $1.1 million from the Hendren Family Limited Partnership LLLP, led by James Hendren of Little Rock;
  • $250,000 from Hank Kelley, CEO of Flake & Kelley Commercial of Little Rock;
  • $500,000 from the Naftal Family Limited Partnership LP of Atlanta, led by Mark Naftal; and
  • $1 million from Whiz Kid Ventures, led by Phil Whisenhunt, the former Little Rock entrepreneur whose last known residence was in the U.S Virgin Islands.

Kelley and Naftal declined to comment. Whisenhunt could not be reached for comment, and Hendren did not return calls seeking comment.

 

 

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