FAYETTEVILLE, AR -- Fayetteville Athletic Club (FAC) faces a foreclosure lawsuit claiming the club is in default on debt totaling more than $10 million, according to the Northwest Arkansas Times.
The lawsuit was filed last Wednesday by SM-WLJ Asset Owner LLC, a Delaware-based limited liability company, the newspaper reported. SM-WLJ purchased the debt from the Federal Deposit Insurance Corp. (FDIC) after federal regulators closed ANB Financial in May, according to the complaint.
On June 29, 2005, FAC executed a $9.5 million loan with ANB. The club went on to borrow $320,000 from ANB on July 21, 2006, and $194,000 on Dec. 3, 2007, the newspaper reported. The debt was transferred on Dec. 29 to SM-WLJ, which later demanded payment in full on the debt totaling $10.6 million to be paid within 10 days.
FAC owners Robert and Katherine Shoulders are named in the lawsuit because they personally guaranteed the debt. Robert Shoulders told the newspaper that his club has been working with the FDIC to resolve the matter since ANB closed. Shoulders added that the FDIC rejected an offer from the club’s bank to buy the debt and that SM-WLJ also rejected an offer to receive $1.5 million in less than 90 days.
“They have not asked us for a payment,” Shoulders told the newspaper. “We intend to fight this and maintain FAC as a great asset to the community. We are going to do whatever it takes to protect the club and its members. We are not throwing in the towel. The club is not in jeopardy of closing.”
FAC is a 120,000-square-foot multipurpose facility that includes amenities such as a day spa, child care services, an indoor track and more than 100 pieces of cardio equipment.