Fort Smith Leaders Seek Litigation Over Unpaid Loan
Fort Smith city directors decided to sue Tuesday night after they say an organization defaulted on a loan that was due years ago. The city says Lend A Hand owes them more than $150,000.
“We want to make sure that we can get the loan repaid,” said City Director Kevin Settle.
The decision to seek litigation was unanimous.
“Let the courts help us get our money back or decide if we should get our money back,” said Settle.
In 1998, the city says Lend A Hand took out a 10 year $150,000 loan to build houses on Koller Place.
“They were deed restricted for affordable housing and for income qualified occupants,” said Matt Jennings, Fort Smith Director of Community Development.
Jennings says the city received a $1500 payment in December of 1999. “We have not received a payment since then,” he said.
If Lend A Hand does not pay the money back city leaders say taxpayers will have to pay it or the money would come out of future HUD federal funding.
“We have to protect the tax payers,” said Jennings.
City leaders are optimistic litigation will allow them to get the money back.
“You work through it,” said Settle. “You work through the courts. You get more data. You gather more information and an agreement will be made.”
5NEWS spoke to a representative with Lend A Hand at Tuesday night’s meeting. He did not want to make a comment about the situation.
Jennings says Lend A Hand partnered with Aarons Inc. They are trying to figure out if that organization should also be responsible.