Gary Combs Sues Bank for $108M

Northwest Arkansas developer Gary Combs along with six businesses of which Combs is either the sole member or a partner, are suing Little Rock-chartered Bank of the Ozarks, its CEO, George Gleason and its Northwest Arkansas division president, J. Shannon White.

A compliant filed in the Washington County Circuit Court is seeking $8 million “for injuries suffered as a result of Defendants’ Deceptive Trade Practices” and $100 million for damages due to “bait and switch” tactics.

Bank of the Ozarks holds the notes for many of Combs’ projects, including Sundowner Ranch, a subdivision in Prairie Grove and the Waterford Estates developments, of which Combs is a one-third partner. The Ronnie J. Hissom Trust is a two-thirds owner of all Waterford entities. Waterford Estates is a single-family development near Goshen with lots for sale in the $70,000 range.

Combs alleges that in March 2007 BOZ, knowing that the Hissom Trust was running short on liquidity, set up short term renewals on Waterford entities and other loans to Combs (two valued at $4.84 million and $9.85 million for Sundowner) to “force Combs to make arrangements to assume the indebtedness of the [Hissom] Trust.”

As a result, and under duress, the documents say, Combs assumed all indebtedness for the Combs/Hissom entities on June 22, 2007 and was charged a combined $94,806 in renewals fees.

On April 30, 2009, the document states, White informed Combs’ chief financial officer that BOZ had “deemed the Sundowner Ranch development a non-performing asset notwithstanding the recent sale by Sundowner of 50 lots.”

Combs seeks damages related to “economic injury equaling $100.47 million as a result of all Defendants’ violations of the Deceptive Trade Practices Act” plus reasonable attorney’s fees.