Condo foreclosure nears resolution
Posted on Wednesday, July 23, 2008
Troubled Springdale developer Brandon Barber will answer Legacy National Bank’s foreclosure petition on a high-profile Fayetteville high-rise in Washington County Circuit Court today.
Legacy National Bank filed the suit in January, claiming the luxury condominium The Legacy Building in payment for outstanding mortgages of more than $ 18. 17 million.
Barber; his wife, Keri; and her sister, Laura Kaffka; and the sister’s husband, Seth Kaffka — operating as Lynnkohn LLC — are named in the suit over the building at 401 Watson St.
The Springdale-based bank filed a countersuit Jan. 4 in a foreclosure case filed by EWI Inc. in September claiming property in repayment for mechanics liens against the building. Eight other construction suppliers were named and had liens against the property.
Rogers attorney Marshall Ney of Mitchell, Williams, Selig, Gates & Woodyard partnership filed Legacy Bank’s foreclosure request.
But all the issues of liens and other claimants in this case have been decided, Ney said Tuesday. He expects a resolution to the rest of the case sometime today.
“The case that is left is a pretty simple and straightforward foreclosure matter,” Ney said.
Barber’s attorney Vaughn Knight of Knight Law Firm in Fayetteville did not return a telephone call seeking comment Tuesday.
Lynnkohn LLC received two loans on The Legacy Building: a mortgage issued Dec. 15, 2005, for $ 16. 7 million and a secondary mortgage for $ 2. 7 million on March 29, 2007.
Exhibits filed with Legacy National Bank’s claim show that only seven of the 37 luxury condominiums were sold between the time the building’s construction began in April 2005 and Dec. 31.
Wayne Swofford of Fort Smith, the court-appointed receiver of The Legacy Building since January, confirmed Monday that one contract is pending on an additional condominium sale. The average price for the condos were more than $ 348 a square foot, supporting court documents state.
Swofford declined to comment further on the building or the case.
The end of the case may leave a bad aftertaste for condominium builders and owners in the area, Arkansas Realtors Association spokesman Ethan Noble said Monday.
Noble, the director of marketing for the Little Rock association, said a foreclosure case on a building as large and high profile as The Legacy Building will influence how investors approach future projects.
“It will have a chilling effect on future investment,” he said. “And it will have some influence on the market for condos in Northwest Arkansas.”
Barber has legal and financial problems on other Northwest Arkansas projects.
Precept Builders Inc. filed a foreclosure complaint in January seeking five lots of the Fayetteville Bellafont development for a labor and materials lien of $ 924, 082. 37. The complaint named Bellafont Retail LLC, CB Ventures LLC, Enterprise Bank & Trust, Barber, Barber Construction Inc., Barber Development Inc. and The Barber Group Inc. as defendants.
Bellafont Land LLC deeded more than 26 acres of the Bellafont development property to Metropolitan National Bank on June 25 to satisfy an outstanding mortgage debt of $ 14. 47 million granted in September 2006.
Bank of Fayetteville also filed foreclosure in January against Barber and one of his investment companies. The suit asks that property in the Timber Trails subdivision in Fayetteville be sold to satisfy $ 972, 585 in outstanding loans on the property.
Parkway Bank in Rogers filed a foreclosure suit June 17 against Barber and his company, BLB Holdings LLC, asking for repayment of more than $ 1. 13 million in a mortgage loan and interest. The suit requests the sale of about 20 acres in Bethel Heights in lieu of payment of the loan granted Oct. 26, 2007. Harrison-based First Federal Bank of Arkansas filed a foreclosure petition July 15 against Barber and several others for a mortgage of $ 5. 18 million in June 2005 for 40 acres at Arkansas 112 and Howard Nickle Road in Johnson. A balance of $ 2, 798, 077. 97 and interest of $ 163, 423. 12 remains unpaid, along with late fees and accumulating daily interest, the petition claims.
To contact this reporter: sroberts@arkansasonline. com
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