Simmons Suites Owner Sues Bank of Arkansas for $28M Arkansas Business Online
Rogers hotelier Patsy Simmons and her limited partnership have filed a compliant against Bank of Arkansas NA alleging fraudulent inducement and deceptive trade practices concerning loans made to her in 2006 and 2007.
The suit, filed in Benton County Circuit Court on Thursday, seeks $8.1 million in compensatory damages and $20 million in punitive damages.
The complaint states that in 2006 the bank loaned Simmons $3.5 million against 20 acres of undeveloped property on 24th Street in Rogers, and alleges the appraisal on the property was inflated at the order of the bank to meet Simmons' cash needs on the Simmons Suites hotel project at another location. The appraisal came in at $7 million.
The bank was "fully aware that she lacked the ability to repay the note," the suit states, because she also had loans valued at $8.3 million on the hotel project and "other debt" totaling $15.1 million.
In 2007, the Bank of Arkansas offered to refinance a $2.5 million loan Simmons had with Simmons First Bank of Northwest Arkansas. BOA eventually offered Simmons another $2 million and said it would loan against 75 percent of the appraised value on the collateral - a two-story, 32,763-SF building and 5.18 acres. The collateral was appraised at $6.1 million, "an amount far in excess of its actual fair market value at the time, but which amount would justify originating the loan."
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