An Arkansas bank has filed a foreclosure lawsuit against the owner of the Bank of America building in downtown Little Rock under the terms of an $8.4 million loan on which its claims the property owner has defaulted.
The lawsuit by First Security Bank, a privately held bank based in Searcy, also said that the property owner, 200 West Capitol, LLC, and its incorporator, Edward D. Corbell, has defaulted on a $150,000 line of credit.
It seeks Pulaski County Circuit Judge Herbert T. Wright Jr. to grant judgments in its favor on both the $8.4 million and the $150,000 line of credit and to hold both defendants personally liable for the judgments.
The bank also asked the judge to hold that payment of the judgments is secured by a lien on the mortgage and that it is superior to "any mortgage liens, tax liens, judgment liens, ownership, dower, courtesy or leasehold rights, if any."
The lawsuit also seeks to have receiver appointed and the property sold at public auction.
Two lawyers for 200 West Capitol -- Aaron Effington and Danielle Owens -- didn't respond to telephone calls or emails Friday afternoon.
They represent 200 West Capitol in a lawsuit the limited liability company filed in August against the law firm of Wright, Lindsey & Jennings, the largest tenant in the 24-story building. That lawsuit involves a dispute over $400,000 in unpaid rent.
The owner wants the 60-lawyer firm not only to pay up but vacate six floors in the building that the firm has called home since it opened in 1969 as the Worthen Bank building, according to the lawsuit that also landed in Wright's court.
At issue in the rent case are three paragraphs in a lease amendment negotiated last year that allows Wright, Lindsey & Jennings to abate 30% of its monthly rent "in the event of landlord's failure to substantially complete the contemplated" in each of the three paragraphs, according to the lawsuit.
Wright, Lindsey & Jennings pays about $65,000 a month for the six floors it leases for its 90 employees, which include 30 support-staff members.
The lawsuit claims the owner has made $400,000 in repairs to the building and its heating and cooling system, elevators and public areas, conceding that some of the work was delayed because of the pandemic.
In its response, the law firm insisted that it has paid all the rent owed under the terms of the agreement and therefore isn't in violation of its lease and shouldn't be kicked out. Further, the repairs that were made didn't meet the standard set out in the lease nor were they sufficient for what is considered Class A office space, the law firm said.
In asking for the immediate appointment of a receiver, First Security in its foreclosure filing cited the litigation involving Wright, Lindsey & Jennings in which the condition of the building was at issue.
Other evidence that 200 West Capitol wasn't protecting First Security's "interest in the real property and fixtures," the lawsuit noted the building owner is delinquent on the property's 2020 real estate taxes, which amount to $183,687.21. They were due Oct. 15.
The $8.4 million loan at issue in the lawsuit was made in November 2020.
The owner hasn't made a payment on that loan since June. Its last payment on the line of credit came in August, according to the lawsuit.
As a result of being in default, the bank declared the principal, interest and all other costs immediately due, the lawsuit states. Interest on the loan is accruing at 16% annually and on the line of credit at 6% annually.
The owner purchased the building in 2006 for $10.2 million, according to the Pulaski County assessor's office. The building contains 290,681 square feet. It has a separate parking garage covering 148,410 square feet.
The building has been marketed as a property for sale in recent years, but no longer is listed on loopnet.com, an online marketing tool to sell or lease commercial properties.
The owner, named after the street address of the downtown tower, has a Los Angeles business address. The case is 60CV-21-6808.