Posted 6/3/2013 12:00 am
Updated 2 years ago
Liberty Bank of Arkansas is targeting another of Jonesboro developer Bruce Burrow’s Little Rock properties after he allegedly defaulted on a loan worth nearly $2 million.
The Jonesboro bank recently filed court papers to foreclose on Burrow’s land at 1919 W. 12th St., which had been rented by the University of Arkansas for Medical Sciences.
In a twist on the case, Burrow has filed his own complaint with the Arkansas State Claims Commission alleging that UAMS broke its five-year lease agreement early. He is seeking at least $874,000 in unpaid rent and other damages from UAMS.
Meanwhile, Liberty Bank is making moves to get its hands on the property.
Liberty Bank made clear in its lawsuit that it doesn’t want a judgment against Burrow because he is working his way through Chapter 11 bankruptcy organization. But the bank said it will reserve its right to seek a judgment if the bankruptcy case is dismissed or Burrow’s debt to the bank isn’t discharged by the bankruptcy court.
Liberty Bank said Burrow, through his Burrow Family Trust, borrowed $1.65 million in May 2010 and secured it with the property on 12th Street, which was being rented by UAMS for its Kids First program, which serves children with special needs.
By April 2011, Burrow had borrowed more money from the bank, which brought the total principle to $1.98 million.
Sometime last June, UAMS moved Kids First to west Little Rock and stopped paying rent, Burrow said in his complaint with the Claims Commission. A UAMS spokeswoman declined to comment on Burrow’s allegations.
Liberty Bank said the loan is in default and, as of March 1, Burrow owed $1.865 million plus interest of nearly $90,000 that was accruing at nearly $325 a day. The lawsuit seeks to recover the property.
Burrow’s bankruptcy attorney, Kevin Keech of North Little Rock, wasn’t immediately available for comment.
You may recall that a receiver was recently appointed to run another Burrow property, the Clarion at 925 S. University Ave., while Liberty pursues foreclosure on it as well.
In that case, the bank alleged that a $14 million loan Burrow and his business partner, Marty Belz of Memphis, took out through HLR LLC in 2003 was in default.
The lawsuit said the principle amount of $12.83 million plus another $688,000 in interest is owed on the loan, which is secured by the hotel.
More Burrow Woes
You can add Wal-Mart Stores Inc. of Bentonville to the list of companies that have a beef with Burrow, although the retailer’s complaint isn’t exactly clear.
Wal-Mart recently won its request in bankruptcy court to have Burrow sit down and explain under oath what was going on with his Chickasaw Plaza in Blytheville.
The retailer said in its court filings that J.C. Penney Co. is required to make rent payments to Burrow, but Burrow told Wal-Mart that those payments aren’t being made.
Wal-Mart said it has already “incurred damages” of more than $500,000 in connection with the property, but the filing didn’t explain what it meant. Wal-Mart’s Blytheville store isn’t located in the plaza, and it wasn’t clear in court filings what connection Wal-Mart had with the property.
An attorney for Wal-Mart, Lyndel Anne Mason of Dallas, declined to comment.
Last month, U.S. Bankruptcy Judge Audrey Evans ordered Burrow to hand over documents in connection with the property to Wal-Mart’s attorneys and was required to sit for a deposition.
Wal-Mart said it needed to know the information “so it can determine the full extent of its claims against [Burrow] and third parties.”
As of Thursday, Burrow’s bankruptcy docket didn’t indicate what became of the documents or the scheduled deposition.
Burrow filed his Chapter 11 bankruptcy petition in July and listed total debts of $17.27 million and total assets of $14.1 million.