Smiley bankruptcy saga should end in 2015 with debt discharge, trials

Cynthia Smiley, wife of former Arvest Banker, Dennis Smiley, and co-borrower on several million in loans from more than a dozen Arkansas banks will walk away owing nothing when her Chapter 7 Bankruptcy is discharged in early 2015.

Smiley claimed she closed her home design business in April this year. The business was insolvent despite the fact she and husband Dennis borrowed more than $1.7 million for the Design for the Home business in recent years.

William Clark Jr., the court trustee over Smiley’s Chapter 7 bankruptcy, recently asked the court to discharge him from any further duties as trustee after his diligent inquiry into the debtors financial affairs and any potential property that could be used to repay debts. Finding none, Clark’s report to the court was that all of the $2,290,608 in debts were slated for discharge.

The largest creditors listed in the bankruptcy filing included:
• First State Bank of DeQueen – $475,000 loans to Design for the Home
• Signature Bank of Arkansas – $189,748 loans to Design for the Home
• Arvest Bank – debt consolidation loan $179,079, $80,000 business loan
• Bank of Arkansas – $151,934 loan to HDS Holdings
• First State Bank of Russellville – $146,425 loan to Design for the Home
• Integrity Bank – $120,000 loans to Design for the Home
• Community First Bank – $107,312 loans to Design for the Home
• American Express Credit Card – $67,727
• Simmons First Bank –  $47,271 loans to Design for the Home
• First State Bank of Lonoke – $39,583 loan to Design for the Home
• Citibank Credit Cards – $33,149
• United Bank – $22,400 personal loan
• Bank of America – $15,800
• Security Bankcard Center – $12,398 debt of Design for the Home
• Legacy National Bank – $10,765 loan to Design for the Home
• Dillard’s Credit Card – $10,117
• Neiman Marcus Credit Card – $5,417

Creditors wishing to dispute the dischargeabiity of Smiley’s bankruptcy have until Jan. 26 to file with the court. At the creditor's meeting last month there were no apparent objections.

Civil lawsuits filed in Benton County that named Cynthia Smiley as co-defendant were also recently closed due to the bankruptcy order filed by Jacoway.

Arvest Bank has refiled its case against Dennis Smiley involving two outstanding loans $31,103 and $50,614 which were made to the couple for the Design for the Home business. That case is set for a jury trial beginning Aug. 17.

In a related matter, Arvest Bank has reopened its lawsuit against First State Bank of DeQueen and Signature Bank with a filing in Benton County Circuit Court Dec. 8. These two banks were not among the 22 others that settled with Arvest over the loans made against Dennis Smiley’s pension fund in Arvest stock as collateral. 

A 5-day bench trial in this case has been set by Circuit Judge John Scott for Dec. 15, 2015, in Benton County.