Commerce Park II suit settled
Posted on Thursday, August 7, 2008
Attorneys for Chambers Bank of North Arkansas and Fayetteville developer Ben Israel reached a settlement Wednesday in a foreclosure lawsuit that will end in the sale of the four-story Commerce Park II building in Fayetteville. Court filings put the building's mortgage, with fees and interest, at more than $ 11. 5 million.
Israel and his Dixie Construction company were defendants in an initial foreclosure suit filed in August 2007 by Vitro America Inc., doing business as Binswanger Glass.
Attorneys settled the case, set for trial Wednesday in Fort Smith with Federal Judge Robert T. Dawson, before court. Dawson issued a summary judgment in favor of Chambers Bank on Friday during pretrial motions.
The eventual foreclosure sale of the building at 2049 E. Joyce Blvd. will be done through the Washington County Circuit Clerk's office. If all goes according to schedule, the building will come up for sale in September to recoup Chambers Bank's outstanding mortgage, said Chambers Bank attorney Jason Bramlett of Friday, Eldredge & Clark's Fayetteville office.
The case had grown to 23 lien claimants against the Commerce Park II, the building's five co-tenant owners and the mortgage's 18 guarantors, Bramlett said.
Most of the 23 lien claimants filed cross-complaints and countercomplaints in the case. Cross claims are made by parties against another party on the same side of a court action, according to Gilbert Law Summaries. Counterclaims are made by defendants against a plaintiff in a civil suit to diminish or defeat the plaintiff's claim, the book states.
The case also drew a number of third-party plaintiffs, or people not involved in the specific litigation but who may have incidental rights or interests to assert, Gilbert states.
Most of the lien claimants had received judgments for the amounts they were owed or had settled their claims at some discount before the trial date, Israel's attorney Derrick Davidson of Fayetteville, said Wednesday.
"From the beginning, my client wanted to see that the contractors and the bank were paid what is due them. They never challenged what was owed. It became a question of having the money to pay them,"Davidson said.
Both attorneys said the case was one of the most complicated they had worked. The docket, when final filings for attorneys fees and other motions are completed, will list about 400 individual entries.
"This was a very complicated case that, with the cooperation of many people, boiled down to a simple foreclosure. And that's where we will end up, with a foreclosure,"Bramlett said Wednesday.
The 60, 000-square-foot building may be the second large Fayetteville building sold in foreclosure auction in as many months.
Legacy National Bank has the right to sell The Legacy Building if Springdale developer Brandon Barber and his partners did not pay the outstanding mortgage of more than $ 18 million by Wednesday night. If not, the 117, 000-squarefoot building can be sold within 30 days, Legacy Bank's attorney Marshall Ney of Mitchell, Williams, Selig, Gates & Woodyard in Rogers said Wednesday.
As of Wednesday morning, that money had not been paid, Ney said.
Kathy Deck, executive director of the University of Arkansas at Fayetteville's Center for Business and Economic Research, said the sale of two large buildings will put downward pressure on the commercial real estate market.
"That is part of the correction that is going on right now,"she said. "We are overbuilt in almost every category of space, even at a time when demand for space is decreasing."
But the right price will always bring a sale, she said.
"Folks with good cash flow and who are well capitalized will be able to take their pick of good bargains,"Deck said. Chris Longly, public affairs manager for the National Auctioneers Association in Kansas City, Mo., said auctioned property sales do not undercut standard market rates. "That is a misconception. Auctions - simply put - set the market value, no more, no less,"Longly said.
To contact this reporter: sroberts@arkansasonline. com
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