Goldens' Meltdown Was Years In Making

Goldens' Meltdown Was Years In Making
Lex Golden (Jason Burt)

Nearly seven years ago, Lex Golden began leveraging up with debt in hopes of riding out a financial storm of his own making. Instead of saving Allied Bank from the ruinous meltdown of a radio-active loan portfolio he built, the Little Rock banker rode the same downward spiral to insolvency. Now, Golden and his remaining business interests are in bankruptcy court to salvage what can be salvaged.

As part of this financial reckoning, Golden has sold jewelry and gemstones to generate cash and bartered with antique furniture to pay legal bills and other debts.

Despite circumstances that have left creditors big and small unpaid, Golden is trying to  hold on to his extensive wine collection while trying unsuccessfully to negotiate six-figure employment contracts for him-self and his son.

Golden steered Allcorp Inc., the parent company of Community State Bank of Bradley (Lafayette County), into bankruptcy court to stave off creditors 11 months ago. A deal to sell his family's 87.3 percent stake in the smallest bank in Arkansas evaporated last month.

The proposed transaction would have paid the Golden family $751,000 plus temporary employment for Golden, chairman and CEO of Allcorp, and his son, Alex, president of Allcorp.

The elder Golden would have received a two-year consulting agreement that paid $10,000 a month.

Alex Golden would have received a one-year employment contract that paid a $100,000 salary, health insurance benefits and a $400 monthly automobile allowance plus a two-year consulting contract worth $6,500 monthly.

Lex and Alex Golden each own 39.28 percent of the $15.5 million-asset bank through Allcorp. The proposed sale also encompassed the shares owned by the trusts for the children of Alex Golden and his sister, Amy McCay, which hold 4.37 percent each.

The deal was called off be-fore it was even submitted for regulatory review. One prospective Community State Bank investor believes the transaction was destined for rejection.

"Lex seemed to think they could get regulators to approve the deal," said the source, who requested anonymity. "But that just wasn't going to happen.

"Any deal we do is going to be good for everyone. We don't do special deals. We'll be watching to see what transpires."

Allcorp's prime creditor, Heartland Bank of Little Rock, wasn't willing to discount the nearly $1.3 million debt to accommodate the planned sale either, according to Lex Golden.

Heartland advocates the sale of Community State Bank since the struggling bank can't produce sufficient dividends for Allcorp to repay the delinquent loan.

Riverside Bank of Sparkman also has two loans totaling more than $527,000 secured by the Allcorp stock owned by Lex and Alex Golden. 

Wine & Trips to France

Lex Golden followed the Chapter 11 bankruptcy of All-corp with a Chapter 7 bank-ruptcy of his own in February. He and his wife, Ellen, listed total assets of $1.9 million and total liabilities of $7.7 million.

Among the bones of contention in the personal bankruptcy is his position that his wine collection is a non-transferrable asset. Maybe it's 500-1,000 bottles, and maybe it's worth $10,000-$25,000, according to Golden.

At a May 26 creditors meeting, bankruptcy trustee Hamilton Mitchell asked Golden to refrain from consuming, disposing or transferring any of the wine.

"Do you agree to comply with that, Mr. Golden?" Mitchell asked.

Golden balked at the question while noting that opening a bottle a wine for him was "like opening a can of green beans."

Pressed for a yes or no, Golden said, "I'm dumbfounded. I don't know how to answer."

The wine collection and spending money on trips to France in the months preceding bankruptcy were topics of interest for a leading creditor, Chambers Bank of Danville.

"You don't have a list of the bottles of wine you own, I assume?" asked John Riedel, the bank's attorney, at an April creditors meeting.

"No," said Golden.

At another point, an incredulous Riedel asked, "You don't remember how many times you left the country during the past 12 months?" 

According to their bankruptcy filings, the Goldens gave Elka Halliger two diamond rings to settle a debt of nearly $32,000 on Nov. 17 during one of their trips to Paris.

Halliger rented the Goldens a Paris apartment for 20 years related to his wife's French antiques business, according to Lex Golden. That venture is included in their bankruptcy.

"I leave all the financial things to Lex," Ellen Golden said at the May creditor's meeting. "He handles the money."

On Jan. 18, 2017, other unspecified jewelry was sold to Little Rock's Braswell & Son Pawnbrokers for $6,220 to pay bills.

On Aug. 29, four un-specified gems were sold to Wilkerson Jewelers of Stuttgart for $56,680. According to Lex Golden, the money was de-posited in the operations of Terry's Finer Foods.

Ten months ahead  of closing Terry's in February, the Goldens took on more than $200,000 of new debt linked with the grocery store that became unsecured debt in their bankruptcy.

Also among their creditors is the Gene Lewellen Sr. estate, owed $286,272 from the 2009 sale of Terry's.

"My father made a lot of phone calls towards the end of his life trying to get it all straightened out," said Jeff Lewellen, son of the late Gene Lewellen. "My mom and dad were owed money, and they should get it. We're just trying to keep our fingers crossed."

The Lewellen debt is among more than $4 million of unsecured debt listed by the Goldens in their Chapter 7 petition. 

Bankruptcy Path of Allcorp and Lex & Ellen Golden


Sept. 1: Allcorp Inc. borrows $2.1 million from Heartland Bank of Little Rock to buy Community State Bancshares Inc., parent company of Community State Bank of Bradley. The loan is secured by the bank's 10,000 shares of outstanding stock.


April 25: With the Allcorp loan in default, Heartland Bank sends notice of its intent to sell the stock at a public sale on June 24. The notice is sent to Lex Golden, chairman and CEO of Allcorp, who personally guaranteed the loan.

June 23: The sale is canceled when Heartland enters into a forbearance agreement with Allcorp and Golden.

July 5: A public sale of the bank stock is rescheduled for July 28 after Allcorp and Golden fail to meet the obligations of the forbearance agreement.

July 15: Chambers Bank of Danville lands a $2 million summary judgment in Yell County Circuit Court against Lex Golden and his wife, Ellen. The judgment is tied to a September 2010 loan to Acme Holding Co., the bankrupt holding company of Allied Bank in Mulberry.

The delinquent loan, used to help recapitalize the struggling bank, was personally guaranteed by the Goldens; the Golden family owned most of Allied Bank through Acme Holding Co. In addition to the Golden family's interest in Allied, the debt is secured by a $5 million Sun Life Financial life insurance policy on Lex Golden with annual premiums of $63,645.

July 27: Allcorp files for Chapter 11 bankruptcy. In later filings, Allcorp claims assets of nearly $3 million and liabilities of about $1.3 million. The assets reflect Allcorp's valuation of Community State Bank. The liabilities reflect debt owed to Heartland.

Sept. 23: The $66.3 million-asset Allied Bank is taken over by regulators and sold to Today's Bank of Huntsville for a negative bid of $6.14 million. 


Jan. 19: The $15.5 million-asset Community State Bank enters into a memorandum of understanding with the Arkansas State Bank Department and the Federal Deposit Insurance Corp.

Jan. 27: A would-be deal is struck to sell the Golden family's 87.3 percent stake in Community State Bank for $751,000. The prospective buyers of the Allcorp stock are listed as three Dallas trusts associated with Eric Donnelly, chief financial officer of Capital Plus; Chad Vose, president of Harbor Portfolio Advisors; and Farzana Giga, CFO of Harbor Portfolio Advisors.

Feb. 9: Chambers Bank acquires the $5 million life insurance policy on Lex Golden from the bankruptcy estate of Acme Holding for $12,000. The bank paid more than $60,000 in premiums to keep the policy in force after Acme entered bankruptcy in April 2014. A Chambers affiliate also holds a delinquent $1.5 million loan that was personally guaranteed by Lex Golden. Chambers Bank held an additional $2.5 million of debt associated with a loan to Acme Holding.

Feb. 24: The Goldens close Terry's Finer Foods one step ahead of eviction. The landmark Heights neighborhood grocery store at 5018 Kavanaugh Blvd. had been purchased in January 2009 from Gene Lewellen Sr.

Feb. 27: Lex and Ellen Golden file Chapter 7 bankruptcy claiming total assets of $1.9 million and total liabilities of $7.7 million. Among the creditors is the Gene Lewellen Sr. estate, owed more $286,272 from the sale of Terry's.

May 23: Heartland asks for court approval to sell the Community State Bank stock or convert the case to Chapter 7 liquidation. The bank proposes hiring DD&F Consulting Group to market the stock to a third-party buyer. The Little Rock firm would be paid a $10,000 retainer to cover hourly billing plus a $50,000 "success fee" if a sale is completed.

Allcorp files a plan to restructure the Heartland debt, essentially converting it to an interest-only, five-year loan bearing an interest rate of 3.25 percent amortized over 20 years with a balloon payment of $1.1 million.

Among its sticking points, the plan hinges on regulatory approval for the bank to pay dividends to Allcorp, something currently restricted.

The reorganization plan also proposes that the sale of any real estate or personal property of Allcorp be paid out: 45 percent to Heartland; 45 percent as dividends to shareholders; and 10 percent retained for discretionary use by Allcorp.

May 28: During a creditor's hearing, Lex Golden discloses that the prospective buyers of his family's Allcorp stock canceled the deal by email on May 27.