Handshake-up: Dispute over I-540 Land

HSG Holdings LLC — J.B. Hunt, Bill Schwyhart and Tim Graham — filed a lawsuit on May 19 against brothers Sam and John Mathias that’s already been settled out of court. The complaint filed in Benton County Circuit Court alleged the Springdale duo had refused to honor a handshake and oral agreement to partner with HSG on a 170-acre land deal in west Rogers.

HSG does business at The Pinnacle Group and is behind the 500-acre Pinnacle Hills complex along Interstate 540 in Rogers.

The group’s attorney, Robert George of Kutak Rock LLP in Fayetteville, drafted a 14-page lawsuit that sought to force the Mathiases to honor the agreement, restrictions on what they can do with the property, compensatory damages of at least $12.7 million plus interest, other costs, lawyer fees and punitive damages as determined by a jury.

But on June 1, the dispute was settled with a confidentiality agreement. The lawyer said he could only read the following prepared statement: “HSG and the Mathiases have settled their disputes. Pursuant to the settlement, HSG holdings is now the owner of 122 acres of the property involved in the dispute.”

Court documents accounting for the remaining 48 acres were not available at press time, but there’s apparently another wrinkle involved.

Schwyhart declined to comment on the dispute but did say the group intended to masterplan the property and extend Pinnacle Hills to the Perry Road interchange.

Handshake-down?

The HSG/Mathias property dispute was actually born out of a divorce case.

The 170 acres were tied up in the divorce of Bill and Diane Adams before Circuit Judge Xollie Duncan Klinger ordered the Adamses to take bids on the property, or have it auctioned by the county on May 4.

According to the suit, HSG and Sam Mathias were in a bidding war from April 28 until the parties met at The Pinnacle Group’s office on May 3. The parties agreed, the suit said, to form Monday Partnership, “an Arkansas partnership,” to acquire and develop the property. HSG would own 65 percent, the suit said, and the Mathiases would own 35 percent.

But later that same day, the suit alleges, “in contravention of the partnership agreement,” the defendants submitted an additional bid of about $12.7 million to Bill Adams that was accepted. Upon hearing they’d been outbid, Schwyhart and Graham said they contacted the Mathiases and were assured the partnership was still in tact and that the brothers had merely gone ahead and secured the property for the group.

On May 5, the suit said, an HSG representative contacted Sam Mathias to try to “formally document the partnership in writing,” but Mathias said there had been no deal.

The dispute was settled before the Mathiases filed any response, and Sam Mathias could not be reached for a comment.