Oral Surgeon, Developer Sues Bank of Fayetteville for $50M

Fayetteville oral surgeon and developer J.B. Hays filed a complaint against The Bank of Fayetteville, several of its directors and one of its officers on Dec. 7. The suit seeks $13 million in compensation and $50 million in punitive damages.

Included as defendants in the suit are BOF directors Larry Baggett, Woody Bassett, Bob Daugherty, David McClinton, Ann Russo, Curtis Shipley and Kent Starr; director, president and CEO, Mary Beth Brooks; and Bob King, executive vice president of loans.

In the complaint, filed in Washington County Circuit Court, Hays and his lawyer allege King solicited Hays’ business in 2006 promising lower interest rates, but has yet to deliver. The suit claims Hays and his partners have a total of nine loans with the bank, valued at a combined $13.73 million, but have paid down the obligation to about $6.96 million.

BOF will not advance money related to a specific property development even though the partnership in the development, JRJBCS LLC, is current on its payments to the bank. Hays is a 50 percent owner in JRJBCS.

The suit also claims the property was “valued by an appraiser at an amount that would justify the” $4.33 million loan made on August 2006, but that on July 9, 2008 another appraisal valued the property at $1.24 million. The suit does not mention what the development is or where it’s located.

The suit alleges the original appraisal was unreasonably inflated or the second appraisal was unreasonably deflated.

A counter suit filed against The Bank of Fayetteville by Gary Combs on Nov. 5 listed the same directors as defendants and alleged similar neglect. Both suits cite the bank’s own loan policy. 

BOF’s lawyers did not return calls.