02:15 31.07.2007 | All news from "Real Estate News"
Developer Terminella, Metropolitan Bank Face Off
The slowdown in the Northwest Arkansas real estate market has produced a slew of bankruptcies, foreclosures, lawsuits and liens in recent months, but no conflict is more explosive than the one brewing between MNB and Terminella.
Little Rock-based MNB, which started building its retail banking presence in Washington and Benton counties two years ago, filed two foreclosures on May 30 demanding more than $11.8 million from Terminella and his partners Myron Morter, Milton Morter and Mark Foster.
Terminella, one of Northwest Arkansas' most prominent developers, fired back July 2 with a counterclaim alleging breach of contract, breach of good faith and fair dealing, constructive fraud and negligence.
Terminella is seeking at least $50 million in damages, a number his lawyers Jim Penick and Robert Ginnaven call "a moving target" that will likely become much larger before the case ever sees the inside of a courtroom.
On July 19, Terminella sold his 440-acre Mountain Ranch property in west Fayetteville, which included 118 developed lots, to a Little Rock investor for $17.14 million.
That may sound like welcome news for the embattled developer, but he estimates he will lose millions by liquidating now rather than seeing the 10-year project through to completion. He blames the MNB foreclosure for losing the financing to continue development of the property.
Terminella has other deals pending that could bring him $30 million or more, but Penick said selling land at a discount and site-ready lots in bulk is not how the developer became successful.
"In November 2006, his business was not in this mode at all," Penick said. "It is in this mode now having to come off and sell as a direct consequence of what the bank did."
Terminella and his lawyers also argue MNB's foreclosure induced the Bank of England (Ark.) to file a foreclosure on June 6 against Terminella and John Montgomery of Montgomery Homes for $990,000 related to a $1.1 million mortgage on lots in the Creekwood subdivision in Lowell.
MNB president and CEO Lunsford Bridges, through spokesman Robert Stebbins, elected not to comment for this story.
MNB's lawyer, Charles Trantham of Fayetteville, did not return calls.
Terminella, however, is taking his beef public and expanded on the pointed allegations of his counterclaim in an exclusive interview.
"It's cost me tens of millions so far," he said. "I estimate it to be off the Richter scale. When you go from a legal and financial status you've worked your whole adult life to achieve and then you have someone do this to you, it absolutely affects every banking relationship we have."
His financial future and the reputation of a bank with nearly $1.8 billion in assets are on the line and at the heart of the case will be how and why a sweetheart deal went so sour.
[ ]
http://www.arkansasbusiness.com/