Frost Default

First National Bank of Springdale has sued Herbert G. “Jack” Frost Jr. and his company, Jack Frost Management Consulting Inc., in Pulaski County Circuit Court for allegedly defaulting on a $250,000 loan from the bank. The suit claims Frost owes the bank more than $163,000.

First National, you might recall, once counted among its major shareholders Bernice and Harvey Jones, the wealthy Springdale philanthropists. Bernice Jones recently dropped a lawsuit against Frost, her former trustee, claiming he had embezzled $1.6 million from the Jones charitable trust.

The FBI is still investigating the matter to determine if Frost committed a crime.

Bernice Jones was still a major shareholder of the bank when the loan was made in June 1995, but on Oct. 1, 1995, the bank was purchased by First Tennessee National Corp.

“I don’t like any insinuation that [the suit] had anything to do with the Joneses,” says Jerry Reinert, president of First National. “We had a contract with [Frost] and he did not live up to his obligations.”

According to First National, the note was secured with $400,000 in life insurance on Frost from a $1 million policy owned by Frost Management. The term-life policy has no cash surrender value and matures only upon Frost’s death.

Rather than seek immediate repayment of the loan balance, First National has asked the Pulaski County circuit judge to assign $400,000 worth of the policy to the bank so the debt will be retired at the time of Frost’s death.

According to court records, Frost had $4.75 million total life insurance at the time he applied for the $1 million insurance policy from Transamerica Occidental Life.