Combs Sues Signature Bank
by January 11, 2010 12:00 am 69 views
Northwest Arkansas developer Gary Combs is suing Signature Bank of Arkansas and its CEO, Gary Head, claiming fraudulent inducement, deceptive trade practices and breach of fiduciary duty.
According to the complaint, filed Dec. 30 in Washington County Circuit Court, Combs is “entitled to punitive damages in an amount in excess of $50 million in order to discourage Head, Signature Bank and others from engaging in similar willful, unconscionable and fraudulent conduct in the future.”
Combs is requesting a jury trial on all claims.
The suit claims Combs negotiated an extension of all his loans with Signature for one year, with no payments and a bullet maturity to be due in July 2010. According to the suit, Combs negotiated directly with Head, who informed him the modifications to the loans had been approved and he need only to make his June payments to effect the loan modification.
In September, the suit states, Signature and Head requested Combs pay $148,668.96 in interest from July to September.
The suit claims Head structured the closing of the loans to take place on Sept. 30, 2009, “so that Combs would have no choice but to make the payments to avoid potential foreclosure proceedings and to extort an additional payment from Combs, in lieu of honoring their agreement.”
The suit further claims Head never intended to modify Combs’ loans, despite his representation.
As a result, Combs has suffered damages of at least $11 million, according to the suit. He is seeking punitive damages in excess of $50 million in order to discourage Head, Signature Bank and others from engaging in similar conduct in the future.