Posted 4/10/2014 04:46 pm
Updated 6 months ago
The Bank of Fayetteville sued former banker H. Dennis Smiley Jr. of Rogers on Monday to collect nearly $480,000 owed for defaulted loans.
It also named Smiley's former employer, Arvest Bank, as a defendant and alleged that Arvest allowed Smiley to repeatedly pledge the same Arvest stock and option plans as collateral and didn't tell the Bank of Fayetteville.
Smiley borrowed $4.5 million or more from at least 18 banks, often by using the same collateral, sources have told Arkansas Business.
Smiley resigned from Arvest on March 13. Sources have told Arkansas Business that he is the subject of a criminal investigation into allegations of loan fraud.
The Bank of Fayetteville also wants to recover another $42,000 from Smiley's father, H. Dennis Smiley Sr., who also defaulted on a loan, according to a counterclaim filed in Benton County Circuit Court.
An Arvest spokesman said the bank doesn't comment on pending litigation. Neither Smiley nor his father could be reached for comment.
In its lawsuit, the Bank of Fayetteville said it began loaning money to Smiley Jr. in 2007, with Smiley using his interest in Arvest's stock purchase plan as collateral. Over the years, Smiley refinanced several of the Bank of Fayetteville loans.
The filing also said that Smiley's father, chairman of the board of First State Bank of De Queen, also took out a $50,000 loan on March 29, 2013.
On March 19, 2014 — only days after Smiley Jr. resigned from Arvest — the Bank of Fayetteville asked Smiley Jr. to repay the loans, but he didn't. On April 1, Bank of Fayetteville said, it asked Arvest to cover Smiley’s debt. Arvest declined.
The next day, Arvest made an interpleader filing with the court, offering to deposit $552,000 — the value of Smiley’s collateral when he resigned — into the court's registry so that the court could determine which creditors get the money.
On April 4, Circuit Judge John Scott granted the request.
The Bank of Fayetteville wants Scott to say that it has the rights to the money from Smiley's stock and option plans. It also wants a judgment against Smiley and his father for the defaulted loans. In addition, it is seeking an unspecified amount of money from Arvest for breach of contract.