DALLAS -- A judge ruled Thursday that a creditor and the trustee in developer Bill Schwyhart's bankruptcy case should have access to a confidential settlement reached in 2013. Schwyhart was a prominent figure in the Northwest Arkansas real estate boom who recently filed for bankruptcy protection in Texas, claiming more than $90 million in debt.
John Leininger of Dallas, an attorney for investment group CHP -- a Schwyhart creditor, and Scott Seidel, the bankruptcy trustee, argued they deserved to know the specifics of the confidential settlement they contend could be an attempt to hide assets.
In May, before Schwyhart filed for bankruptcy protection, CHP filed suit in Benton County Circuit Court, saying Schwyhart and several John Doe defendants were ducking collection efforts. CHP contends Schwyhart lived rent free for four years in a house worth several million dollars in the Pinnacle Hills subdivision in Rogers while pretending to be caretaker while he was actually the owner through a shell company, Pinnacle Villa LLC.
Attorneys for Pinnacle Villa had asked the court to keep the confidential settlement secret. Attorney James Billingsley of Dallas argued Thursday that even if the entity wanted to turn over the settlement, since others were involved, he'd be breaking terms of the settlement if he did so. He said Pinnacle Villa was not part of the settlement but it had access to it if the judge ordered it turned over.
Schwyhart lists over $90.1 million in debts as part of his Chapter 7 action, of which $19,408 is secured by property and $90,100,017 is listed as nonpriority unsecured claims. Schwyhart and his wife, Carolyn, claim assets of a little more than $600,000, mostly in the form of individual retirement accounts.
Judge Harlin Hale with the U.S. Bankruptcy Court Northern District of Texas in Dallas ruled Thursday that Pinnacle Villa must turn over the agreement to CHP and the trustee but added that both had to agree to keep the details of the settlement confidential. He also gave CHP permission to depose Ken Shemin, the attorney of Tim Graham who is owner of Low Tide Holdings and a former business associate of Schwyhart.
In February, Regions Bank transferred a $209,212 judgment in a 2009 suit against Schwyhart Holdings LLC and others to CHP, making CHP a successor in interest.
In a May deposition that was part of court filings in Benton County, Graham said Low Tide Holdings conveyed the Pinnacle Hills house, at 9 Clubhouse Drive, to Pinnacle Villa. Graham said he wasn't involved in the the terms of the deal but understood from conversations with his lawyer Shemin that the move was part of a negotiation to settle a lawsuit. When asked, Graham confirmed that Pinnacle Villa had no interest in that lawsuit. He also said he didn't know if Schwyhart or Schwyhart Holdings got any benefit from the settlement.
During the Northwest Arkansas building boom, Schwyhart partnered with late trucking magnate J.B. Hunt and Graham on the Pinnacle Hills Promenade mall, which opened in 2006. He was also one of the investors, along with Hunt, in the now defunct chartered jet company Pinnacle Air LLC, which did business as Aspen JetRide, and filed for Chapter 7 bankruptcy in early 2009.
After Hunt's death in 2006, his widow, Johnelle Hunt, and Graham broke ties with Schwyhart. Schwyhart and longtime business partner Robert Thornton formed Pinnacle Investments LLC after the split.
In April 2010, eight development companies managed by Schwyhart filed for bankruptcy claiming nearly $42 million in debt. Johnelle Hunt and Graham also sued Schwyhart claiming he defaulted on various loans.
Some of the primary creditors in Schwyhart's bankruptcy include Bank of America with $18 million; Springfield, Mo.-based Great Southern Bank with $14 million; John P. Calamos of Naperville, Ill., with $11.4 million; Little Rock-based JB Hunt LLC, with $10.7 million; Pine Bluff-based Metropolitan National Bank with $5.1 million; and Low Tide Holdings of Fayetteville, which has been dissolved according to the Arkansas secretary of state's website, with $4.5 million.
Calamos is the chairman of financial company Calamos Asset Management. He became a partner with Schwyhart when Calamos' Ajax merged with Pinnacle Air.
The filing also listed Bentonville-based CHP LLC as a creditor but didn't include an amount owed.
Business on 10/12/2018
Print Headline: Access to developer's settlement OK'd