Two Sebastian County circuit judges recently ordered judgment of foreclosure for several properties owned by state Sen. Jake Files, R-Fort Smith, and his construction company that amount to more than $4 million.
Circuit Judge Michael Fitzhugh granted a partial summary judgment to First Western Bank in Booneville for $2.1 million on Nov. 14 for four defaulted loans taken out in 2013 by Files and his wife using three Fort Smith properties as collateral: 300 Free Ferry Landing, 4105 Free Ferry Landing and 3203 Waco St.
According to the Sebastian County Assessor’s Office, the appraised value of the three properties combined is $1,872,150. Daily interest accruing on the loans is about $270. Friday was the deadline for payment.
The third amended complaint by First Western Bank filed in July against Files, his wife, and all parties owing money to them, laid claim to “at least $1,232,818.23.”
Files did not respond to a request for comment and the attorneys for Files and the banks were not available Wednesday.
The Nov. 14 order by Fitzhugh grants First Western Bank’s claim of superiority to parties laying claim to money from the Fileses. A group of seven co-defendants, including the Internal Revenue Service, were placed under First Western Bank and co-plaintiff First National Bank of Fort Smith because it was shown loans on the properties were taken out with First Western Bank before liens on the properties were placed by First National Bank.
Other co-defendants listed in the lawsuit to lay claim of superiority for funds include: Arvest Bank, Ed and Stacy Ralston, American Builders & Contractors Supply Co. (ABC Supply Co.), Centennial Bank, Arkansas Development Finance Authority, Kenny Gourley, Superior Stoneworks Masonry Inc. and Mike Shuffett.
The liens of Arvest Bank are in third position and priority on the properties at 300 Free Ferry Landing and 4105 Free Ferry Landing. The liens on 3203 Waco St. and 4105 Free Ferry Landing by the Ralstons, the IRS and ABC Supply Co. are in fourth, fifth, sixth and seventh positions.
“The judgment liens do not attach to the primary residence at 300 Free Ferry Landing … because it is exempt from judgment liens,” the order states.
In October, Circuit Judge James O. Cox issued an order granting the Federal National Mortgage Association’s claim of the $1.8 mortgage foreclosure lawsuit with FFH of Fort Smith Limited Partnership and several other local entities over the Rock Creek apartments on North 50th Street in Fort Smith.
The Arkansas Development Finance Authority had confirmed most of the Fannie Mae lawsuit in an answer filed May 1, including section 22, which alleged the breach of contract for “an unauthorized transfer of a Controlling Interest in Borrower” to Rock Creek GP of Rogers. The transfer constituted an “event of default,” according to Fannie Mae.
Files remains under investigation with the Federal Bureau of Investigation for possible wire fraud and money laundering in relation to the incomplete River Valley Sports Complex.
Files also remains chairman of the Senate Revenue and Taxation Committee and serves on a variety of committees.