Creditors Pursue Restitution from Lindsey
by June 28, 2010 12:00 am 98 views
Two creditors filed lawsuits in U.S. Bankruptcy Court June 21 claiming former Northwest Arkansas developer John David Lindsey misrepresented his financial status in order to get loans.
The Bank of Fayetteville is looking to recoup more than $1.7 million and Trans Lease Inc. of Denver is seeking more than $500,000.
Lindsey filed for Chapter 7 personal bankruptcy on Feb. 20, claiming liabilities totaling $169.6 million and listing assets of less than $10 million. However, Lindsey, 39, has one-third interest in a limited partnership trust, and is expected to receive half distribution at age 40. Sources previously told the Northwest Arkansas Business Journal the trust is valued in the tens of millions of dollars.
Inheritances received more than six months after filing bankruptcy typically are not subject to, or included in, the bankruptcy.
If, however, the bankruptcy court determines misrepresentations made on financial statements induced a lender to make a loan, then that loan is non-dischargeable.
The Bank of Fayetteville claims Lindsey “made materially false written statements about his financial condition.”
It further states Lindsey, on May 20, 2009, represented he had equity or positive net worth somewhere between $64 million and $70 million. The suit cites five other similar statements, and thus claims the $1.7 million it is owed by Lindsey should be deemed non-dischargeable.
The Trans Lease suit asserts that Lindsey, on April 2, 2008, submitted personal financial statements indicating about $3.4 million in income and $95,000 in expenses, as related to JDL Leasing LLC. The figures were submitted as part of lease agreement for “a number of dump trucks.”
The dump trucks eventually were repossessed and sold, leaving a deficiency balance of $554, 215.83. Trans Lease is represented by the Nixon Law Firm of Fayetteville, while the Bank of Fayetteville is represented by Conner & Winters LLP of Tulsa and Fayetteville.