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Purchase Offer Calls on Allcorp Bankruptcy

3 min read

A new investment group has emerged as a prospective buyer of Community State Bank of Bradley (Lafayette County).

The proposed $2.35 million acquisition brought a temporary lull in the Chapter 11 bankruptcy of the bank’s parent company, Allcorp Inc.

A June 28 hearing to consider dismissing the case and allow Heartland Bank of Little Rock to sell the $15.5 million-asset bank was postponed until Nov. 3. The timeout in the legal proceedings opens a three-month window for the transaction to undergo regulatory review and if approved deliver full repayment to Heartland, Allcorp’s lead creditor.

Allcorp owes Heartland $1.3 million, a debt secured by the holding company’s ownership of Community State Bank.

As with an earlier deal that was abandoned, three Texans are leading the latest effort to purchase the smallest bank in Arkansas.

This time, the known players are Jeff Hobbs, a branch manager for First National Bank of Hughes Springs, Texas, and former president of Bloomberg State Bank in Atlanta, Texas; Taylor Chandler, senior vice president and commercial loan officer at City Bank in Plano; and Derick Murway, president of Montage Development, an upscale homebuilder in Southlake, Texas.

Hobbs owned a 12.2 percent stake in Community State Bank when it was sold to an investment group led by the Lex Golden family in September 2010. Hobbs served as an executive vice president at the bank during 2007-12 and did a one-year stint as president during 2013-14.

In round numbers, the proposed $2.35 million acquisition would repay Heartland Bank and leave about $1 million to be divvied among Allcorp shareholders.

Most of the stock is owned by Alex Golden, president of the holding company, and Lex Golden, Allcorp chairman and CEO. Each owns 39.28 percent, worth a combined $785,600 after the Heartland loan is repaid.

Most of that money would go to repay two loans totaling $537,037 and secured by the Allcorp stock. The loans are held by Riverside Bank of Sparkman (Dallas County), which also holds a second mortgage of $208,714 on Lex Golden’s Little Rock home.

All three Riverside loans are linked with the Chapter 7 bankruptcy of Golden and his wife, Ellen, listing assets of $1.9 million and total liabilities of $7.7 million.

Their personal bankruptcy in February trailed Allcorp’s bankruptcy last July and the April 2014 bankruptcy of the Golden family’s Acme Holding Co., parent company of Allied Bank of Mulberry.

If approved, the sale would net other Allcorp shareholders a combined $214,400.

Jacksonville investors Frank Swift Jr. and Michelle Andrews each hold a 4.62 percent stake. Trusts for the children of Alex Golden and his sister, Amy McCay, each hold 4.37 percent. Rounding out the ownership are three more Jacksonville investors who have 1.15 percent shares: William/Pamela Hall, Terry/Tonia Weatherford and the Rice Family Living Trust, led by Susan Rice.

The Golden-led investment group paid $3.1 million for Community State Bank nearly seven years ago. Back then, total assets stood at $23.8 million.

The high-water mark for total assets was reached at year-end 2013: $30.1 million. The number has steadily eroded since then.

Heartland rejected the proposed Chapter 11 reorganization, which was listed among a string of reasons the case should be dismissed. The bank wasn’t keen to receive less than the full value of its claim while the stockholders retained their equity interest in Allcorp.

Chief among its complaints was an allegation that the Goldens filed the bankruptcy case in bad faith: “the timing of the Chapter 11 filing evidences an intent to delay or frustrate the legitimate efforts of the debtor’s secured creditor to enforce its rights.”

Last year’s Allcorp bankruptcy petition was filed at 4:33 p.m. on July 27 just ahead of a stock sale scheduled at 10 a.m. the next day.

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