LITTLE ROCK — The people who submitted the winning bids for two houses that once provided a canvas for entrepreneur Jennings Osborne’s elaborate Christmas lights displays have filed a breach-of-contract lawsuit, saying they haven’t been able to close on the sales.
The houses at 5 Robinwood Drive and 3 Robinwood Drive were among five Osborne properties that were auctioned in June to pay off debts, including ones that prompted Metropolitan National Bank to file two foreclosure lawsuits against Osborne properties after Osborne died last year.
Ryan Wessels of St. Louis and Ralph Duda III of Pulaski County submitted the winning bid for the house at 5 Robinwood Drive, the lawsuit says. Including a 10 percent “buyer’s premium,” the total price was $214,500, the suit says.
Linda Newkirk and her husband, Ray Camp, submitted the winning bid, at $165,000, including the buyer’s premium, for the house at 3 Robinwood Drive, the lawsuit says.
The houses, which face Cantrell Road, are on either side of the former Osborne family home, which was also sold at the auction.
The breach-of-contract lawsuit, filed Friday in Pulaski County Circuit Court, says the would-be buyers “have been given to understand that the failure to close is the result of objections” by Cenlar FSB, a New Jersey-based federal savings bank that the suit identifies as the primary secured lender on the houses.
Thomas Blackmon Jr., whose company handled the auctions, said Tuesday that Cenlar rejected the winning bids.
The buyers were notified shortly after the auctions that the lenders would have to approve of the sales before they became final, he said.
“Anytime you buy a piece of property no matter what it is, where it is, someone has to approve of the sales price before they release the lien,” Blackmon said.
The lawsuit says the “auction terms indicated that the property was to be sold ‘as is,’ with ‘clear title.’
“No reserve was advertised in the catalog, identified in any publications, or stated prior to the commencement of the auction by the auctioneer,” the lawsuit says.
Both bidders submitted $20,000 in “earnest money” and signed contracts stating that the sales would close in 30 days, the suit says.
Duda and Wessels signed an agreement extending the closing deadline to Sept. 13 in exchange for the release of their earnest money, the lawsuit says.
Newkirk and Camp did not enter an extension agreement and have not gotten their money back, the lawsuit says.
The lawsuit, filed on behalf of the bidders by attorney Allison Gladden of Little Rock, asks for Osborne’s widow, Marie “Mitzi” Osborne, to be ordered to close on the property. It also asks for Cenlar and Metropolitan Bank to release any liens on the property that would prevent the title from being transferred.
Calls to Cenlar’s headquarters weren’t returned Tuesday. Barry Jackson, a spokesman for Metropolitan National Bank, declined to comment.
The three houses on Cantrell Road were once the site of Christmas displays involving about 2 million lights, a spectacle that drew lines of spectators and created traffic jams along Cantrell Road.
In 1993, neighbors filed a lawsuit contending that the Osbornes’ lights had created a nuisance.
After losing a legal battle that reached the Arkansas Supreme Court, Jennings Osborne took most of the lights to Disney World in Orlando, Fla., where the lights became part of an annual display.
In 1968, Jennings and Mitzi Osborne founded the Arkansas Research Medical Testing Center, which tested drugs on people. The firm was sold to affiliates of Stephens Inc. for $24 million in 2004. The Osbornes then started another company, Osborne Research Center, in 2010.
In addition to the houses on Cantrell Road, other properties put up for auction in June included a house on Kanis Road in Little Rock known as Breezy Meadows, and a house on Lake Hamilton in Hot Springs.
Blackmon said lenders have not raised any objections to the other sales.
Arkansas, Pages 11 on 11/14/2012