News

COURT REVERSES DECISION ON HOTEL

By Ray King/OF THE COMMERCIAL STAFF
Saturday, October 27, 2007 12:27 AM CDT

The state Supreme Court ruled Thursday that the former owners of the Royal Arkansas Hotel and Suites should have been notified about a restraining order prohibiting them from disposing of or moving hotel property before the order was issued.

The high court reversed a decision by Jefferson County Circuit Judge Jodi Dennis that granted the order, as well as an order to inspect the financial records of the company, and sent the case back for further proceedings.

On Feb. 13, Gerhardt Becker, the former manager of the Royal Arkansas, and International Hotel Management Inc., filed a complaint against the hotel’s owners, IBAC Corp., Turner Hughes Corp., and others, alleging fraud and breach of contract, among other things.

Claiming that irreparable harm or damage will or might result, Becker asked for, and received, a court order that prohibited the company from selling, moving, destroying or otherwise disposing of any corporate asset, and corporate record.

Dennis approved the restraining order and order to inspect without a hearing, prompting the appeal.

The high court said that because no notice was given before the order was issued, “there must be an affidavit or verified complaint that irreparable harm or damage will or might result.

“The complaint in the present case is unverified, therefore (the former owners) should have been notified of the application for a restraining order, and of the request for the order to inspect,” the court said.

Zions First National Bank of Utah foreclosed on the former owners in February, and the property is now owned by Arkansas Lodging LLC, the firm that purchased it in August from the bank.

Print this story   |   Email this story