Posted 9/20/2010 12:00 am
Updated 2 years ago
Little Rock developer Steve Clary and his wife, Cynthia, owe $168.6 million to creditors, according to newly released documents filed in their Chapter 7 bankruptcy case.
Steve Clary, who was indicted by a federal grand jury in July on four counts of wire fraud and one count of mail fraud in connection with loan proceeds he allegedly misused, owes $138.5 million to creditors holding unsecured claims, according to the filings.
Clary only listed $1.4 million in assets - $1.2 million of that is the couple's west Little Rock home, which has had several liens slapped on it. But it appears the value of the property may not even cover the first two creditors.
First in line is U.S. Bank Home Mortgage of Owensboro, Ky., with a $645,000 claim, followed by Bank of America of Charlotte, N.C., with a $585,000 claim.
Other lien holders with an interest in the include: BancFirst of Oklahoma City, $9.9 million; Waterford Investors LLC of Oklahoma City, $6 million; Banc of America Leasing & Capital, $3.8 million; PlainsCapital Bank of Lubbock, Texas, $1.7 million; Centennial Bank of Conway, $1.6 million; Regions Bank of Birmingham, $1.4 million; and Valley View Bank of Overland Park, Kan., $1.1 million.
Top creditors holding unsecured claims include M&I Marshall & Ilsley Bank of Milwaukee, $116.5 million. That debt was tied to Clary's development of the Shackleford Crossings lifestyle center in west Little Rock. That high-profile property is now under the care of a receiver after Clary defaulted on the project's $74 million funding agreement with M&I. (Among the actions that triggered the M&I default was Clary's pledging his 79 percent ownership in Shackleford Crossings as collateral on other debt.)
Other creditors holding unsecured claims include Wells Fargo Bank, $17 million; Hall 3000 Internet Ltd., $1.7 million; and Liberty Bank of Jonesboro, $1 million.
Clary's financial problems date back to at least 2007, when he reported a business loss of $13.3 million, according to the filings. He didn't list what he made or lost in 2008 or 2009. For those years he didn't bother to file income tax returns.
As of July 31, Steve Clary listed 21 companies that he had an ownership interest in, including Clary Development Corp. of Little Rock.
"We have a policy we don't comment on these things," Steve Clary told Whispers last week.
Clary declared debt comes close to that of Fayetteville real estate developer John David Lindsey, who earlier this year filed for Chapter 7 bankruptcy and listed $169.6 million in debts. But Lindsey had more assets - $9.9 million - to offset those liabilities.
In the past year, the Clarys have generated $10,475 in revenue from selling their bikes, furniture, art and other personal items, according to their bankruptcy filings. The Clarys, though, still own a baby grand piano and a 17-year-old, full-length mink coat.
The bankruptcy filings show that neither Steve nor Cynthia Clary is working. But he receives $1,400 a month from loans from friends and other sources.
The couple's monthly expenses exceed their income by $8,400, including a $5,600 mortgage payment, $1,100 a month for health insurance and $800 on food.
While Steve Clary is sorting out his bankruptcy paperwork, his criminal trial looms. Last week, a U.S. District judge appointed a public defender to Clary's case, set for trial May 16.