The Sebastian County Circuit Court issued a decree of foreclosure on two homes built and owned by state Sen. Jake Files' Fort Smith construction company.
Foster, Files and Harris LLC was ordered to pay more than $468,000 for two June 2014 loans from the Griffin Family Trust in Fort Smith to build the homes at 8100 and 8105 Finches Grove Road in the Rye Hill area.
According to the ruling from Judge James O. Cox, if the note isn't paid by Monday the property will be sold at a public auction at the front door of the Sebastian County Courts Building.
According to foreclosure decree, FFH gave promissory notes to the Griffin Family Trust on June 30, 2014, for lots four and 33 at the new housing development. The notes were for $188,713 and $176,811. Partial collateral for the loan agreement was delivered in the form of a construction mortgage, security agreement and financing statement.
Due to November 2015 and January 2016 tax liens on FFH, the Internal Revenue Service could also be involved, the judge's order states. However, the IRS liens are in second position, or "inferior and subordinate to the mortgage liens of the Griffin Family Trust," the ruling states.
Richard B. Griffin, trustee of the Griffin Family Trust, said by phone Tuesday he could not provide any comment on the ruling.
Files said by email Tuesday he and FFH are working on a payment arrangement with the IRS and the foreclosure was a "formality as a part of the legal process, and it is amicable on both sides." Files also stated that FFH does not intend to buy the houses.
The foreclosure decree also notes Ed and Stacy Ralston as co-defendants with Jake and Michaela Files. But since the Ralstons had a judgment on the property filed Jan. 30, the Ralstons' "judgment lien" was "extinguished." It was "inferior to the mortgage liens of the Griffin Family Trust and no Answer was filed in the time allowed," the ruling states.
Cox granted a summary judgment in December in favor of Ed and Stacy Ralston for a lawsuit filed against FFH Construction in 2014.
