The troubled Little Rock apartment complex known as the Big Country Chateau will head into receivership, Pulaski County Circuit Judge Cara Connors confirmed during a hearing on Friday.
Sal Thomas, a senior official at a Houston-based real-estate firm, is expected to be named receiver, meaning he will be tasked with stabilizing the 151-unit complex on Colonel Glenn Road beset by code violations and a foreclosure lawsuit.
However, at the request of the defendants' attorney, Connors on Friday agreed to lift an asset freeze she had ordered with regard to one of the three corporate defendants in the lawsuit filed last year by the Arkansas attorney general's office.
In the complaint, then-Attorney General Leslie Rutledge said the complex's owners had violated the Arkansas Deceptive Trade Practices Act. The case has continued under Rutledge's successor, Attorney General Tim Griffin, after his swearing-in last month.
On Feb. 3, Connors in a temporary restraining order granted the state's request that a receiver be appointed to oversee the complex, collect rent payments and make repairs.
She further ordered that defendants' assets be frozen, barred defendants from tampering with or destroying records and ordered them to file an accounting of assets and rent money received from tenants.
The part of her order freezing assets will be lifted for defendant Apex Equity Group LLC, according to Connors' comments Friday. The two other defendants are Apex Big Chateau AR LLC and Big Country Chateau, LLC.
Apex Equity Group, LLC will still have to file an accounting of assets; likewise, the destruction of records remains off-limits.
The hearing occurred two days after the attorney general's office asked Connors to name Thomas -- the executive vice president of Tarantino Properties' multifamily operations -- as receiver for Big Country Chateau.
Although Sylvester Smith, an attorney for Big Country Chateau, had previously asked Connors to halt her receivership order until a hearing could be held, he indicated during Friday's hearing that he had no objection to the appointment of a receiver.
Smith also acknowledged there were significant issues with the management of the property, but argued against the decision to freeze the assets of Apex Equity Group, LLC.
The hearing mainly focused on the ties between the three corporate entities and the property in light of the decision to freeze assets of Apex Equity Group, LLC. Attorneys for the state called Autumn Baker, an investigator with the public protection division of the attorney general's office. She was the only witness who testified Friday.
Officials from the three companies that have been sued were not in the courtroom. According to Smith, they were unable to get to Little Rock from New Jersey.
Smith told reporters after the hearing that Apex Equity Group, LLC had nothing to do with the property at the present time. The current owner, Apex Big Chateau AR, LLC, was "accepting responsibility" for everything going on, Smith said.
Property records show Apex Big Chateau AR, LLC acquired the complex at 6200 Colonel Glenn Road from Big Country Chateau, LLC in 2019 for roughly $6.4 million.
Smith also claimed that nearly $300,000 in back rent was owed to his clients. He said that "these folks tried to do the best they could to keep things going for the residents."
He acknowledged that Thomas was going to be the receiver and wished him the best of luck. Nevertheless, Smith suggested a local person would have been preferable, citing the difficulty of managing a property without "boots on the ground" on a daily basis.
A sentencing hearing for Big Country Chateau in a separate, long-running case is scheduled for Monday afternoon in Little Rock environmental court. As part of the case, city officials carried out another mass inspection of the complex's units last Tuesday that yielded life-safety code violations.
Earlier this week, the city of Little Rock announced an effort to help tenants relocate.
Kevin Howard, the director of the city's Housing and Neighborhood Programs Department, said on Thursday that the city was working to make hotel vouchers available to Big Country Chateau tenants as well as deposit and rental assistance for those attempting to move to a new complex.
The property is also the subject of a foreclosure complaint in Pulaski County Circuit Court filed by the Federal Home Loan Mortgage Corp. on Jan. 31.