One Bank & Trust of Little Rock on Thursday announced the settlement of an $18 million lawsuit over assets seized from entities connected with the late Layton "Scooter" Stuart, its former chairman, president and CEO.
The settlement is among the U.S. Department of Justice, the U.S. Treasury, One Bank & Trust, the Stuart family and BHL Financing LLC, led by trucking heiress Johnelle Hunt.
In a news release, One Bank & Trust said it will receive $6.9 million. The money comes from $14.9 million held by the U.S. Treasury after seizing cash and other assets two years ago from Stuart.
The infusion should increase its capital to $19.6 million, barring any operational losses in the third quarter. The bank has lost $12.8 million during the past three years as total assets have declined to $326 million.
Arkansas Business reported details of the settlement on Monday. Another $8 million will be split evenly between Stuart's family and the U.S. Treasury, which provided $17.3 million in Troubled Asset Relief Program (TARP) funds that helped keep the bank solvent.
Most of the money held by the government came from a life insurance payout by John Hancock Life Insurance Co. after Stuart died on March 26, 2013. Stuart allegedly diverted about $2.3 million of TARP funds to repay the bank for funds he used to pay personal expenses.
On Thursday, One Bank & Trust said resolving the lawsuit "accelerates" its "return to core profitability, increasing the bank’s legal lending limits, enhancing the ability to provide services to its customers, reducing monthly expenses for legal and professional fees and immediately improving the overall quality rating of the bank."
"We are pleased to announce the successful completion to this long and difficult litigation," CEO Jerry Pavlas said in a news release. "This completely resolves and provides permanent closure between Onebanc and Stuart family interests. Onebanc’s recovery of nearly $10 million in this matter will allow the bank to continue providing extraordinary banking services to the customers and communities it serves."