Benton County Circuit Court Judge John Scott granted Bank of the Ozarks and Summit Bank one more week to file their answers to the Arvest interpleading regarding Dennis Smiley’s Arvest stock proceeds.
Bank of the Ozarks and Summit, now merged, each have their own answers to file with the court about the funds they are owed from Smiley – loans that could have been guaranteed by his Arvest stock account.
Judge Scott gave the two banks until May 16 to file their responses. Arvest placed $551,754.58 on deposit with the court in its April 2 filings as an interpleader, asking the court to disperse the money to the creditors, as it had no way to determine how to divide the proceeds between the 21 banks making claims for the money.
A hearing date on the Arvest interpleading is expected to be set after the May 16 extension.The court agreed to Arvest’s motion and accepted funds into the registry on April 4. Since that time a flurry of filings, answers and counter suits have been entered with the court.
The Bank of Fayetteville was the first to respond on April 7 with a 200-page filing that included a counter suit against Arvest Bank and the other lenders who loaned money to Smiley. Bank of Fayetteville is owed $250,000.
On April 11, First National Bank of Fort Smith filed its own suit against Dennis Smiley and Arvest Bank claiming loan defaults to Smiley totaling $383,384.
On April 21, Integrity Bank filed an answer to the Arvest interpleading and also sued Dennis Smiley doing business as Design for the Home, claiming $159,781 is in default.
First State Bank Russellville also filed its answer on April 21 and countersued Arvest Bank and Dennis Smiley asking for judgments totaling $145,965. First Security Bank also filed its answer to the court on April 21, providing no details for the amount its owed by Smiley and his business interests.
On April 22, First National Bank of Fort Smith, filed an objection to the Arvest interpleading claiming a breach of fiduciary responsibility.
First State Bank of DeQueen filed its answer April 28 to the Arvest interpleading. First Bank of Hampton filed its answer to the Arvest interpleading on April 30, and countersued Arvest Bank and Dennis Smiley for $180,000 it is owed. The two loans were made to Smiley, who pledged his Arvest bank stock as collateral.
First State Bank NWA, now Today’s Bank, and Centennial Bank each filed an answer to the Arvest interpleading on May 1. No details were given on the amount owed.
Benefit Bank filed an answer to the Arvest interpleading on May 2. Dennis Smiley also filed his answer that same day. Smiley asked the court to deposit the funds to him to cover his legal costs.
Signature Bank of Fayetteville entered their answer to the Arvest interpleading on May 5. No details were given on the amount owed to Signature on loans made to Smiley in 2009 and extended several times.
Bank of Oklahoma, Chambers Bank and Legacy National Bank have yet to file an answer with the court regarding the Arvest interpleading. Summit and Bank of the Ozarks asked for and were granted filing extensions until May 16.
OTHER SUITS FILED
Delta Trust & Bank filed its own suit against Smiley on March 25. Smiley has answered that claim admitting that the loan made to he and his father Henry Dennis Smiley Sr. for $245,126, and the corresponding documents might have contained signatures that were not original. Smiley Sr. also answered the court confirming that he did not sign or authorize any loan in his name. Delta has asked the court for a judgment against Smiley Jr.
Simmons First Bank sued Dennis Smiley doing business as Design for the Home on May 2, asking the court for judgments totaling $67,879. Simmons also sued Centennial Bank who may have claims against the same collateral that is residential property in Fayetteville which Smiley sold to Debra Parker-Ladd in August 2013 for $1, according to Washington County real estate records.
On April 11, First State Bank of Lonoke filed suit against Smiley for $159,000 for three loans made and renewed between 2011 and 2012.
First Federal Bank also sued on April 24 against Smiley for nonpayment of loans totaling $70,000 that were guaranteed by a family trust.
The civil suits will be heard in Benton County. Meanwhile, the ongoing federal criminal investigation has not resulted in any criminal fraud charges. It is possible the banks who can prove fraud in relation to their loans made to Smiley could be pulled into the federal proceedings and eligible for restitution if awarded by the court.
Legal counsel familiar with the case told The City WIre that there are a couple of scenarios in which Smiley could face criminal charges. Given the mounting evidence of fraud entered into the circuit court proceedings, there is a high probability a grand jury indictment could be waived.
The other scenario would involve a “Filing by Information.” This would involve a defendant’s attorney working out a deal with U.S. Attorney’s office. In this scenario, a defendant would waive indictment and enter a negotiated plea.
Tim Tarvin, law professor at the University of Arkansas, said in federal cases there is an incentive to come forward and cooperate because in doing so the defendant could shave points off of the sentencing formula. Tarvin has no connection to the Smiley investigation and was speaking merely about the process.
He said the fastest way for creditors to get paid is to race to the courthouse and file their judgments. But given the number of mounting claims, he said creditors are likely to get pennies on the dollar when all their legal costs are factored into the equation.