Court Dismisses Schwyhart Bankruptcies

U.S. Bankruptcy Judge Ben Barry dismissed Chapter 11 bankruptcy proceedings by seven limited liability companies managed by Northwest Arkansas developer Bill Schwyhart. The decision was filed in U.S. Bankruptcy Court on May 24.

Schwyhart filed for reorganization in April through eight companies related 11 buildings and $34.93 million in debt to Metropolitan National Bank of Little Rock and about $6.65 million to Chambers Bank of Danville.

All the buildings are in the Pinnacle Point area of Rogers, but do not involve all of the buildings in that area.

The order will allow one of the LLCs, Pinnacle Point Properties, to proceed, but will also allow MNB to proceed with a foreclosure action filed in Benton County Circuit Court in 2009. The bank “may not collect any money judgment” while the LLC is in bankruptcy.

According to a schedule filed in early May, Pinnacle Point Properties LLC is a 39,718-SF office building located at 5506 Walsh Lane. The LLC listed $6.36 million in total assets and $48.32 million in liabilities.

Chambers Bank has a secured first mortgage valued at $5.95 million and a secured second mortgage valued at $6.65 million on the building, as well as an unsecured second mortgage valued at $6.61 million. Metropolitan has no mortgage attached to the Walsh Lane building, according to the document. 

Stanley Bond, Schwyhart’s bankruptcy lawyer, said the order essentially states that the “rents and leases are owned by the bank.”

Metropolitan National Bank declined to comment. Schwyhart did not return a call for comment.