Chambers Bank Lands $2 Million Golden Judgment

Lex Golden, chairman, CEO and lead shareholder in the bankrupt Acme Holding Co.
Lex Golden, chairman, CEO and lead shareholder in the bankrupt Acme Holding Co.

Lex and Ellen Golden were hit with a $2 million judgment in Yell County Circuit Court on July 15. Chambers Bank of Danville received the favorable ruling in connection with the Little Rock couple’s personal guarantee of a long delinquent loan to Acme Holding Co.

The case is one in a string of lawsuits spawned by the bankruptcy of Acme, the parent company of Allied Bank of Mulberry. Under the Golden family’s ownership and management, the bank has lost more than $14 million since 2010.

The year-long, bad-debt lawsuit against the Goldens culminated in summary judgment during a brief hearing. Circuit Judge Terry Sullivan said there was no substantial issue of fact in the case, and the Goldens submitted no evidence to refute the claim of Chambers Bank.

“Your client signed the note,” Sullivan said. “I don’t have anything before me that the plaintiff put a gun to the defendant’s head and made him sign the note.”

The $2 million promissory note — dated Dec. 16, 2010, and guaranteed by the Goldens — was linked with efforts to recapitalize Allied Bank. It followed a Sept. 29, 2010, loan of $3 million from Chambers Bank to Acme, which is also in default.

Acme’s sole source of money to service its debt to Chambers Bank and other creditors is dividends from Allied. That income stream was turned off by regulators because of the bank’s poor fiscal condition.

The last time Allied paid a dividend to Acme was in the third quarter of 2010. Bank regulators prohibited the bank from declaring dividends in order to preserve its capital in the face of mounting loan losses.

In 2010, the bank reported year-end high-water marks for total assets ($185 million) and equity capital ($18 million). Total assets now stand at $72.4 million, and equity capital has fallen to $4.9 million. Staffers now number 40, down from a peak of 60 during 2011.

Allied Bank remains under the terms of a cease-and-desist order by the Arkansas State Bank Department, dating back to Nov. 15, 2011, and a supervisory agreement with the St. Louis Federal Reserve, May 2, 2012.

What follows is a chronological summary of lawsuits surrounding Acme Holding, Allied Bank and the Golden family.


Chapter 11 reorganization of Acme Holding Co.
Filed April 29 in U.S. Bankruptcy Court in Fort Smith

The move by the parent company of Mulberry’s Allied Bank is made a step ahead of Chambers Bank of Danville foreclosing on delinquent Acme loans secured by Allied Bank stock.

Acme listed total assets of $12.2 million and liabilities of $11.4 million in its bankruptcy petition, but that position has worsened as liabilities have swamped deteriorating assets.

Acme’s lead creditor is Chambers Bank, which holds all the shares of Allied Bank as security on two delinquent loans totaling more than $4.5 million. C Holdings LLC, an affiliate of Chambers Bank, also holds a $1.4 million delinquent loan claim against Acme.

A third Acme creditor, Hildene Asset Management, represents the holders of trust-preferred securities with a claim of more than $3 million.

The case was converted to Chapter 7 liquidation on July 23, 2015, by U.S. Bankruptcy Judge Ben Barry. He ruled the reorganization plan championed by the Goldens was overly speculative with poor terms for creditors.

The plan was predicated on the financial turnaround of Allied Bank and eventual regulatory approval to restart dividend payments from the bank to Acme to service its debt. Barry’s order deemed both events unlikely given the flagging fortunes of Allied Bank.

The public docket on Acme’s bankruptcy case has gone silent since Oct. 2, 2015 as the court-appointed trustee, Ray Fulmer of Fort Smith, privately shops Allied Bank in hopes of finding a buyer.


Allied Bank and Acme Holding Co. v. Chambers Bank
Filed June 22 in Crawford County Circuit Court

The complaint alleges tortious in-terference by Chambers Bank with the planned sale of three Allied Bank branches in 2014.

The Lex Golden family, which controls Acme and Allied, hoped to sell bank offices in Mansfield (Sebastian County), Van Buren and Alma. However, Chambers wouldn’t sign off on a proposed deal that allegedly could’ve netted Allied Bank about $2 million but wouldn’t repay any Acme debt.

The deal surfaced again during the early stages of Acme’s bankruptcy, which drew separate objections from the Arkansas State Bank Department and the Federal Home Loan Bank of Dallas.

The complaint by Allied and Acme also mentions that Walter Quinn, the lead investor in Heartland Bank of Little Rock, tried to buy Acme’s debt in August 2013 from Chambers Bank. The case is awaiting a trial date.

Chambers Bank v. Lex and Ellen Golden
Filed July 17 in Yell County Circuit Court

The bank received a $2 million judgment on July 15, 2016, against the Goldens, as personal guarantors on a loan to Acme Holding Co.

The last interest-only payment on the loan was made on Dec. 31, 2013. The loan matured on Dec. 16, 2015. The debt is secured by 4,000 shares of Allied Bank stock and a $5 million term life insurance policy on Lex Golden.

Golden portrayed his personal guarantee as an accommodation to Acme Holding; Chambers Bank portrayed the personal guarantee as a condition to extending the loan agreement.

Golden implied that Chambers Bank shouldn’t look to collect from him and his wife because it was aware that they didn’t have “the ability to repay the debt.”

Chambers Bank said the Goldens “are simply trying to delay the inevitable, which is a judgment against them in this case.”

Federal Deposit Insurance Corp. v. Alex Golden, Amy Golden McCay et al
Filed Sept. 5 in U.S. District Court in Atlanta

The FDIC registered judgments from the Georgia case in U.S. District Court in Little Rock against the adult children of Lex and Ellen Golden, Alex Golden and Amy McCay, and their grandchildren’s trusts on March 7, 2016.

The judgment against Alex Golden, CEO of Allied Bank, is $780,788 and uncalculated interest since Sept. 5, 2014, plus attorney fees of $118,889. The judgment against McCay is $282,288 and uncalculated interest since Aug. 27, 2014, plus collection costs of $42,342.

The awards date back to Jan. 9, 2015, and stem from lawsuits to recover delinquent loans used to buy stock in Acme Holding Co., the now-bankrupt parent company of Allied Bank.

The FDIC filed the lawsuit as receiver of the $4.1 billion-asset Silverton Bank of Atlanta, closed by the Office of the Comptroller of the Currency on May 1, 2009.

The Silverton loans were originated on Jan. 18, 2008, and matured on Jan. 13, 2013.

John S. Hunter IRA v. Lex Golden et al
Filed Oct. 23 in Crawford County Circuit Court

The case, brought on behalf of an individual retirement account of the former president of Allied Bank, seeks more than $356,000.

According to the complaint, Hunter’s IRA is owed $178,082 on each of two delinquent promissory notes dating from Dec. 27, 2011. Payment was due in full Dec. 27, 2014.

The debt is owed by two trusts established for the benefit of the grandchildren of Lex Golden, chairman and CEO of Acme Holding Co. He personally guaranteed payment of the notes, which financed the purchase of Hunter’s Acme Holding stock.

The defendants include Golden, the two trusts and the trustees: his son, Alex, and his daughter, Amy McCay, who left the bank as vice president in 2013 amid regulatory scrutiny over her duties and her salary.

Originally scheduled for bench trial on May 17 in Crawford County Circuit Court, the case is on hold until September pending the performance of a settlement agreement.


Lex and Ellen Golden v. Chambers Bank
Filed May 9 in Crawford County Circuit Court

The case is cut from the same cloth as the 2015 lawsuit filed in the name of Allied Bank and Acme Holding Co.

In this version, the Goldens allege Chambers Bank is essentially responsible for causing all their money troubles. That claim is tied to allegations that Chambers Bank wouldn’t agree to various proposed transactions to sell or buy Allied Bank branches.

Nor would Chambers Bank agree to a proposed transaction to sell delinquent debt owed by Allied’s parent company, Acme Holding.

The complaint alleges that Chambers Bank’s actions led to the bankruptcy filing of Acme Holding more than two years ago and the continued deterioration of Allied Bank.

The lawsuit also implies the actions of Chambers Bank in dealing with Acme and Allied impaired the couple’s ability to repay other debts.

Among the delinquent debts were two loans totaling $1.5 million owed by Ellen Golden’s Little Rock antique business, a $599,813 loan owed by a Golden family real estate venture in Washington County and a delinquent loan of unspecified value secured by the family’s ownership of Community State Bank of Bradley (Lafayette County).

Lex Golden, through Allcorp Inc., borrowed $2.1 million six years ago to finance the purchase of Community State, which now has $16.9 million in assets — the smallest bank chartered in Arkansas.

The Golden family controlled 87 percent of Allcorp at the time. The balance of shares was divided among four Jacksonville families: Frank Swift Jr., Ben Rice, William and Pam Hall and Terry Weatherford.

The Goldens claim damages of more than $2.5 million.

In response, Chambers Bank noted a string of alleged legal flaws with the “rambling, internally inconsistent” complaint, which didn’t include proper supporting documents.

In summing up its motion to dismiss the case, Chambers Bank described the complaint as “an incoherent conglomeration of statements and arguments which cannot be fairly characterized as a proper pleading.”

The motion to dismiss, filed July 7, is still pending.

Allied Bank

Assets, Income and OREO
All dollars in thousands

  Total Assets Net Income OREO*
2008 $143,454 $1,864 $2,264
2009 $174,126 $1,736 $535
2010 $189,377 $764 $1,473
2011 $174,541 -$1,619 $3,596
2012 $157,331 -$3,470 $7,604
2013 $136,853 -$4,865 $11,740
2014 $111,538 -$1,024 $9,709
2015 $79,327 -$2,254 $8,096
2016** $72,378 -$834 $7,896

*Real estate recovered in connection with bad loans.
**As of March 31.

Source: Federal Deposit Insurance Corp.