Schwyhart Manor in Rogers, Nearly $3.2M Draw Scrutiny


Schwyhart Manor in Rogers, Nearly $3.2M Draw Scrutiny

The battle over control of a grand home in Rogers continues in the Chapter 7 bankruptcy of Bill and Carolyn Schwyhart.

The dispute between the Schwyharts and creditors has also brought into question what happened to nearly $3.2 million from a once-secret settlement unveiled earlier this year.

Scott Siedel, trustee of the couple’s bankruptcy estate, believes they own the 9,484-SF residence through a corporate charade.

Siedel has acknowledged his intention to file actions to have the house declared to be part of their bankruptcy estate. That move would require a court order to remove the mansion’s owner of record, Pinnacle Villa LLC.

The Schwyharts have disavowed an ownership interest in the home that they owned outright in 2001, lost through foreclosure in 2012, moved back into in 2014 and moved out of in March 2018.

In turn, Pinnacle Villa LLC is trying to fend off Siedel and have its ownership claim upheld in court.

According to depositions and subpoenaed records, Pinnacle Villa was created through Fayetteville attorney Stanley Bond and the bill for that work was paid by Carolyn Schwyhart.

Bond represented Bill Schwyhart, a former high-flying northwest Arkansas developer, on several occasions including work on parts of a global settlement that involved the Rogers home and more.

Emails gathered through discovery note that Bond met with Bill Schwyhart in February 2014 to discuss the transfer of the house, a move ultimately made to Pinnacle Villa.

The cost of incorporating Pinnacle Villa in Delaware and associated ex-penses was paid by Carolyn Schwyhart through an American Express Card issued to HMG Investments LLC.

The Schwyharts finally admitted under questioning by the U.S. trustee on Dec. 17 that they “are the only living, breathing humans” who have an ownership interest in HMG Investments through a web of limited liability companies.

The Schwyharts didn’t list HMG among their assets in the bankruptcy even though they were using its account after filing Chapter 7. An estimated $605,000 flowed into the HMG Investments bank account since July 2014, according to court filings. In their bankruptcy petition, the Schwyharts did list HMG Investments as a creditor owed $490,000. That puts them in the unorthodox position of being a de facto creditor to themselves.

The questioning by the U.S. trustee was done as part of an examination into allegations of bankruptcy fraud against the couple.

James Baxter of the Baxter Law Firm in Benton is representing the bankruptcy trustee in the dispute with Pinnacle Villa along with a disagreement with Fayetteville attorney Travis Story.

The trustee is seeking a court order to require Story to turn over the case file for Schwyhart Holdings in litigation involving a small fleet of corporate jets loaded with debt.

Story declined the trustee’s request for the files, citing attorney client privilege.

“The trustee’s position is that all of the files from that case are under his control,” Baxter said. That claim is based on Schwyhart Holdings being part of the couple’s bankruptcy estate, and the trustee controls the bankruptcy estate.

In its 2013 settlement with John Calamos and his Ajax LLC, Schwyhart Holdings was entitled to receive nearly $3.2 million. However, that cash allegedly was lost to a creditor, Recipio Investment Strategic Fund I LLC.

A big question looming over the settlement and the bankruptcy case: Why would Schwyhart negotiate a settlement with Calamos et al and in the end receive nothing?

Recipio received control of the nearly $3.2 million from the Calamos settlement. The money allegedly was sent to TWG Resources LLC, controlled by Schwyhart’s son, Alex.

Travis Story did legal work for Recipio, which on paper puts him in the odd position of representing Schwyhart and a Schwyhart creditor.

Brian Ferguson, a Rogers attorney and lead protagonist trying to collect on judgments against Schwyhart, keeps working to connect more dots in what he views as a corporate shell game to hide assets.

Ferguson is trying to uncover more about HMG, Recipio and Pinnacle Villa. Ferguson believes all three limited liability companies are alter egos of Schwyhart. Through his CHP LLC, Ferguson has subpoenaed records from Bentonville attorney Josh Mostyn.

Among other things, Mostyn refused to turn over canceled checks that flowed through his trust account connected with the limited liability companies. This dispute awaits judicial review.

“I have a hard time seeing where canceled checks would be covered by privilege,” said Josh Silverstein, professor at the Bowen School of Law in Little Rock.

Ferguson has uncovered records that show HMG Investments sending money to Mostyn’s trust account and in turn, the trust account paying annual property owners association dues related to the Schwyharts’ former home.