Posted 7/23/2008 04:15 pm
Updated 1 year ago
Legacy National Bank of Springdale on Wednesday received a decree of foreclosure on the Legacy Building in downtown Fayetteville from Washington County Circuit Court Judge William Storey.
With all other claims dismissed or settled, Legacy National held the remaining liens on the building and was awarded a total of judgment of $18.72 million against guarantors Brandon and Keri Barber and Seth and Laura Kaffka, who secured the loans through Lynnkohn LLC.
If the Barbers and Kaffkas do not pay within 10 days, the property will be sold on the Washington County Courthouse steps on Aug. 2.
If the building sells for less than the amount due, Legacy National Bank will most likely pursue other nonexempt assets held by the Barbers and Kaffkas, according to LNB attorney Marshall Ney of Mitchell Williams Selig Gates & Woodyard PLLC of Rogers.
The judgment requires the Barbers and Kaffkas to file detailed financial statements within 45 days of the order listing all assets, specifying any claimed to be exempt.
Personal residences are exempt, which could include the Barbers' 5,700-SF home in east Fayetteville appraised at $1.25 million. Nearly three years after it matured, the Barbers finally paid off a $660,000 construction mortgage in April that was written and twice extended by Chambers Bank of North Arkansas.
Keri Barber and Laura Kaffka are the daughters of Chambers CEO John Ed Chambers.
Brandon Barber was represented in the foreclosure proceedings by Vaughn Knight of Fayetteville. Keri Barber and the Kaffkas were represented by Patrick McDaniel of Mena.
In its Jan. 2 foreclosure filing, LNB attempted to claim first lien rights, but the contractors who had begun work on the project before LNB made its first loan on the Legacy by law held first lien priority.
The last remaining lien claimant, National Home Centers, was dismissed Wednesday morning.
Ney said he could not comment on whether Legacy National paid to settle the liens filed by contractors who worked on the project.
The Barbers and Kaffkas are held liable for the original loan of $16.7 million signed on Dec. 15, 2005. The Barbers are the sole guarantors on a second Legacy Building loan originally totaling $2.7 million signed on March 29, 2007.
The 7-story, 37-condo building opened in May 2007, but only seven units have sold and more than $1.8 million in liens by contractors were filed beginning just months later.
Counting unpaid principal, interest, penalties and fees, the amount due on the first loan is $15.77 million and the $2.94 million on the second.
Including the Legacy foreclosure, Barber has been hit with more than $25 million in foreclosures this year, including on his company headquarters on Old Missouri Road in Springdale.