Posted 4/25/2014 03:14 pm
Updated 8 months ago
In his first response to one of many lawsuits, former Arvest Bank executive Dennis Smiley Jr. acknowledges that his father's signature on a promissory note "may not be the signature of Smiley Sr."
Through his attorney, Kenneth Mourton of Ball & Mourton Ltd. of Fayetteville, Smiley responded Thursday afternoon to a March 25 lawsuit by Delta Trust & Bank of Little Rock.
Also on Thursday, First Federal Bank of Harrison filed a civil lawsuit to recover almost $70,000 in loans made to Smiley Jr. last year.
Smiley Sr. had previously filed his own response to Delta's claims, denying he signed any Delta loan documents. He also denied signing documents connected to a loan from Bank of Fayetteville.
Of 20 banks believed to have loaned a total of $4.5 million or more to Smiley Jr., Delta Trust was the first to take its claim to court and the first to get a response from him.
Beyond admitting that his father may not have signed the document, Smiley's response denied most of Delta Trust’s allegations and asked the Benton County Circuit Court to dismiss the complaint.
Delta Trust sued Smiley and his father, who is chairman of First State Bank of De Queen, for defaulting on a $245,126 loan, which Smiley Jr. received Feb. 20 through Delta Trust’s branch in Bella Vista. The loan was to Smiley Jr.’s HDS Holdings LLC and guaranteed by Smiley Jr. and, purportedly, his father.
Delta Trust alleged that Smiley Jr. failed to make the first payment due on March 20 — a week after he resigned as CEO of Arvest's Benton County market.
"Defendants have confessed that they are either unable or unwilling to pay the obligations owed," Delta Trust’s complaint says.
In his response, Smiley Jr. admitted that no payment on the loan has been made, but he denied that he received the loan knowing that the money "could not and would not be paid."
Documents appended to Delta Trust’s complaint show signatures by "Henry Dennis Smiley Jr." and "Henry Dennis Smiley Sr.," which appears on the promissory note as trustee of the Henry Dennis Smiley Revocable Trust.
First Federal Gets in Line
The debt is among a roster of similar loans secured by HDS Holdings and Dennis Smiley Jr.'s stake in an executive compensation account tied to the value of Arvest Bank stock.
Smiley allegedly used the same collateral to secure as $4.5 million to $5 million in loans from 20 banks doing business in Arkansas, many of which are now filing lawsuits to recover the money. Arkansas Business has also learned that Smiley Jr. is the subject of a federal criminal investigation for loan fraud.
First Federal, the latest to get in line, filed suit Thursday afternoon to recover the balance on two loans made to Smiley's HDS Holdings LLC and personally guaranteed by him. The loans also were allegedly guaranteed by his father and a family trust.
First Federal claims $49,999 owed on a $50,000 loan made on April 10, 2013, and $20,000 owed on a $25,000 loan made on May 31, 2013.
The suit names HDS Holdings, H. Dennis Smiley Jr., Henry Dennis Smiley of De Queen and the Henry Dennis Smiley Revocable Trust as defendants.
On Monday, three other banks — Integrity First Bank of Mountain Home, First State Bank of Russellville and First Security Bank of Searcy — filed similar lawsuits.