Bank sues Gary Combs settles with another.(REAL ESTATE)

The Bank of Fayetteville filed a lawsuit against northwest Arkansas developer Gary Combs, Gary Combs LLC and Electric Avenue Carwash LLC last week.

In the complaint filed in the Circuit Court of Washington County, the bank lists three counts seeking a total of $5.5 million in unpaid principal, plus unpaid and accrued interest on two different properties in Washington County.

The first is for a property known as Dead Horse Mountain, near Stonebridge Golf Club in Fayetteville. The bank seeks more than $5 million related to a $5.2 million mortgage made to Combs in 2006. The loan has been modified twice in that time.

"Mr. Combs and Combs LLC have defaulted on and breached the terms of the Second Modification and Dead Horse Mortgages by, among other things, failing to make monthly payments as required under the terms of the said instruments," the complaint states.

In the second count, BOF seeks $526,492, plus unpaid interests and fees related to the Electric Avenue Carwash in Springdale. The complaint states a similar modification and payment history.

Combs had no comment on the suit. On May 1, Combs filed a complaint in Washington County against Bank of the Ozarks seeking $108 million. On June 30, Combs and BOZ settled the lawsuit out of court.

Combs' lawyer on that case, Rick Woods of Fayetteville, said he could not discuss the suit, but said that an order of dismissal had been filed.

In an early conversation with Combs about the BOZ suit, he said the bank agreed to take back a total of about 720 lots at Waterford Estates near Goshen and at the Sundowner subdivision in Prairie Grove. He claimed the property was valued at about $26 million.

In an e-mail from BOZ, a spokeswoman said the settlement resulted in Combs conveying to the bank all collateral securing the related loans and Combs dismissing all claims against the bank and other defendants. In return, BOZ and other defendants agreed to release all claims.

In a prepared statement, George Gleason, chairman and CEO of Bank of the Ozarks, said, "We are pleased to have this matter resolved and to have title to our collateral. This puts us in a position to develop and implement an effective plan for the orderly sale of these properties without the delays that would result from continued litigation. To resolve this matter quickly, we agreed to forego our claim for a deficiency judgment against the borrowers and guarantors. We concluded this was in our Company's best interest based on our belief that any potential recovery from a deficiency judgment would not significantly exceed, and might even be less than, the costs of obtaining and collecting such deficiency judgment."

Last month, Combs also filed complaints against Metropolitan National Bank of Little Rock and First Federal Bank of Harrison.

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