Pulaski County Circuit Judge Mackie Pierce agreed Wednesday to appoint Michael McAfee as receiver in a lawsuit filed by Simmons First National Bank against Mountain Pure Water Co. of Little Rock, its owner and others.
Simmons requested that McAfee be appointed the receiver.
Last month, Simmons sued Mountain Pure, its primary owner, John Stacks, companies affiliated with Mountain Pure and two banks - Merchants and Planters Bank in Newport and Ozark Heritage Bank in Mountain View. The banks, which could claim an interest in some of Mountain Pure’s property, are defendants only for the purpose of being notified about what happens in the case, according to the lawsuit filed last month.
Metropolitan National Bank made six loans to Mountain Pure in recent years. The debt on those loans, which are in default, is more than $16.5 million, Simmons said in its lawsuit. Simmons inherited the loans when it acquired Metropolitan last year.
McAfee will be receiver with respect to Simmons’ collateral. That collateral includes the real estate and equipment that Mountain Pure owns. Besides Little Rock, Mountain Pure has affiliated bottling plants in Magee, Miss., and Palestine, Texas. The company employs about 100 people.
“We sought [a receiver] because it’s in our best interests and in the best interest of everyone concerned,” said Steven Wade, Simmons First National Bank’s Arkansas regional chairman. “We certainly hope that the company survives and continues to thrive.”
There will be no immediate change with the company’s employees, McAfee said.
“The intention is that nothing changes today, nothing changes tomorrow,” McAfee said. “After that, I can’t tell you because I don’t know. The way the receivership works, I have only access to public information and I’ve seen no financial information on the company whatsoever.”
McAfee testified that he has 10 years of experience as a commercial banker and has worked for the Blackstone Group, an investment firm. He has not worked with any Arkansas banks, he said. He sought a fee of $200 an hour.
A federal grand jury indicted Stacks in December, accusing him of falsely claiming that company equipment in Damascus was damaged in a 2008 tornado so he could get more than $500,000 in disaster-relief funds.
Stacks was charged with three counts of wire fraud and money laundering in connection with wire transfers in 2008 from the U.S. Small Business Administration in Kansas City, Mo. The transfers were made in response to Stacks’ claims for a $703,000 loan.
North Bay Investors Ltd., a Florida investment group, sued Mountain Pure in February saying it and Stacks owed the firm almost $500,000. North Bay also sought to put Mountain Pure into receivership.
In addition to his position with Mountain Pure, Stacks had been chief executive officer of Home Bank of Arkansas from 2001 until being replaced this year.
Business, Pages 23 on 04/17/2014