LITTLE ROCK — Crews & Associates, a Little Rock investment firm, sought a summary judgment Tuesday in a 2010 lawsuit filed by investors who claim Crews was fraudulent in selling bonds for a Louisiana development.
The lawsuit was filed by Nuveen High Yield Municipal Trust, Nuveen Municipal High Income Opportunity Fund, Nuveen California High Yield Municipal Bond Fund and Nuveen Preferred Investment Trust V, all listed as Massachusetts business trusts; and Pacific Specialty Insurance Co., a California insurance company.
The plaintiffs in the lawsuit in Pulaski County Circuit Court seek unspecified damages and claim the construction of the 550-acre Carter Plantation development in Livingston Parish, La., east of Baton Rouge was mishandled. The investors bought about $39 million in bonds and notes through Crews.
Other defendants in the lawsuit include First Security Bancorp of Searcy, which owns Crews & Associates, and Reynie Rutledge, First Security’s chairman; Crews executives Rush Harding III, James Jones, Joseph Bumpers, David Crews and Donald Winton; Donald Jack, a Crews director; and Richard Williams, a Louisiana-based Crews employee.
Carter Plantation and affiliated companies issued $6 million in bonds in 2004 underwritten by a Memphis investment firm, the complaint said. A golf course and country club were completed that year, according to the suit.
Crews & Associates began underwriting bond issues and the issuance of notes in 2005 to complete other phases of the project. By 2006, Carter Plantation and affiliated companies were not paying bills, according to the suit.
The lawsuit claims that between August 2006 and September 2007, a period that included issuance of hotel bonds and taxable notes, the companies “failed to pay vendors, commingled funds, defaulted on loans, failed to pay employment taxes, submitted sham draw requests, misappropriated proceeds from the bond issues and became the subject of lawsuits and lien filings.”
Nate Coulter, a Little Rock attorney representing Crews, asked Pulaski County Judge Mackie Pierce for a summary judgment on four of the six claims in the case: two related to hotel bonds for the development bought by Nuveen and two on taxable notes on the development that Nuveen bought.
Pierce should reject the claims against Crews concerning the hotel bonds because Nuveen’s claim was made after the three-year statute of limitations had expired, Coulter said. Nuveen’s allegations concerning the taxable notes should be dismissed because Crews and Nuveen had an agreement that Nuveen would investigate the legitimacy of the notes on its own, Coulter said.
Denver attorney Michael Cillo, who represents Nuveen, said Crews’ motion for summary judgment was “seriously premature.” Crews made misrepresentations in its documents touting the bonds and taxable notes, Cillo said.
Coulter denied that Crews had made any misrepresentations.
Nuveen will continue to pursue two claims on marina bonds that Crews sold to Nuveen, regardless of Pierce’s decision on the four requests for summary judgment.
Business, Pages 25 on 01/09/2013