A Pulaski County Circuit Court judge on Friday granted the appointment of a receiver to take control of Big Country Chateau apartments, paving the way for the complex's utility bills to be paid and for the start of repairs to be made on the property.
Owners Apex Big Country Chateau AR LLC will have to freeze their assets and account for all rent collected and how it was spent, according to the order from Judge Cara Connors. A temporary restraining order was also included to, among other things, prevent the destruction of records.
The order stated that the court found the defendants "have engaged in and are likely to continue to engage in conduct in violation of the Arkansas Deceptive Trade Practices Act," in which Attorney General Tim Griffin is to enforce and seek restitution and an injunction to prohibit any person from further engaging in any deceptive or unlawful practice.
"It's a great victory for tenants and the state, we got exactly what we asked for," Griffin said in a phone call on Friday. "It's not the end of the fight but it's a significant victory to move closer to a positive resolution for tenants."
The defendants have three days to submit the name of a mutually agreed-upon receiver or give the court a list of names.
On Thursday, Little Rock Deputy City Attorney Alan Jones was granted a warrant for inspection of the 151-unit complex at 6200 Colonel Glenn Road.
Attorneys for Apex owner Oron Zarum entered no-contest pleas in October to 34 code safety citations, each a misdemeanor, in the environmental court.
Instead of sentencing the company on Thursday, the judge set a sentencing hearing on the violations for Feb. 13 to give the company an opportunity to "provide any testimony and/or evidence in mitigation," Jones said in an email.
"The City intends to execute the warrant as soon as practicable," he said. "The City will also present evidence of the conditions present at Big Country Chateau to the Court on February 13 and will ask the Court to sentence Apex appropriately."
In addition to the code violation case, the apartments' owners face a consumer protection lawsuit filed in Pulaski County Circuit Court by Griffin and a foreclosure suit filed Tuesday by the Federal Home Loan Mortgage Corp.
Griffin's lawsuit accuses the complex owners of collecting monthly payments from tenants that were meant to cover utilities, but then failing to pay the bills, resulting in shutoff notices being issued.
It also accuses the owners of violating the state's Deceptive Trade Practices Act by offering units for rent with code violations that threaten tenants' health and safety.
Violations of the Deceptive Trade Practices Act can yield a civil penalty of up to $10,000 each, according to the complaint.
With 151 units at the apartment complex, the state could seek $1.5 million in penalties if there is at least one violation per unit.