Legacy Looks to Dismiss Barber Bankruptcy

As one legal battle between a developer and his bank heads toward trial, another is just beginning to brew.

In our Aug. 25, issue, we reported on Brandon Barber’s Aug. 20 filing for Chapter 11 bankruptcy protection for his Lynnkohn LLC.

Lynnkohn is the Barber-controlled company that developed the Legacy Building in downtown Fayetteville financed with more than $18 million in loans from Legacy National Bank of Springdale.

Barber defaulted on the loans and a foreclosure consent decree was entered on July 23 that found him, his wife Keri and Seth and Laura Kaffka liable for the $18.7 million debt.

Also on Aug. 20, Barber filed a $10 million lawsuit against LNB and Flake & Kelley Commercial, which was marketing and managing the building on behalf of the court-appointed receiver Wayne Swofford.

Barber accused the bank of not allowing sales that would have reduced his debt and Flake & Kelley of being the bank’s accomplice in circumventing the receiver’s authority.

The bankruptcy filing triggered an automatic stay on the foreclosure sale of the building scheduled for Aug. 21.

FK terminated its agreement with Swofford on Aug. 22, and LNB filed a motion to dismiss the bankruptcy filing.