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Bancorpsouth Bank v. Robert Lynn Hall (Individually and As Trustee of the Robert Lynn

February 7, 2011

BANCORPSOUTH BANK, PLAINTIFF,
v.
ROBERT LYNN HALL (INDIVIDUALLY AND AS TRUSTEE OF THE ROBERT LYNN HALL REVOCABLE TRUST), VICKI B. HALL (INDIVIDUALLY AND AS TRUSTEE OF THE NICOLE LYNN STYANT REVOCABLE TRUST), ROBERT LYNN HALL, JR., STEVEN SCOTT HALL, HUNTER'S POINT, LLC, AND M & L HOLDING COMPANY DEFENDANTS.



The opinion of the court was delivered by: Greg Kays, Judge United States District Court

ORDER GRANTING PRELIMINARY INJUNCTIVE RELIEF

This case arises out of three loans totaling almost $9 million made by Plaintiff BancorpSouth Bank to Defendant Robert Lynn Hall and a limited liability company controlled by him, Defendant Hunter's Point, LLC. Two of the loans were secured by the outstanding common stock in M & L Holding Company, the owner of First Community Bank of the Ozarks. At the time these loans were made the outstanding common stock controlled the holding company. After Hall defaulted on the loans he orchestrated a stock split of the outstanding preferred shares in the holding company, which effectively transferred control over the holding company to his immediate family members. BancorpSouth subsequently filed this lawsuit against Hall and the other Defendants seeking repayment of the loan and injunctive relief.

Now before the Court is Plaintiff's request for a preliminary injunction made in Count VI of the Complaint (doc. 1). The parties agree that there is no factual dispute here and that an evidentiary hearing is unnecessary.*fn1 After reviewing the various briefs, replies, and sur-replies submitted by the parties, the Court holds BancorpSouth is entitled to a preliminary injunction.

Provisional Findings of Fact

The Court finds the facts to be as follows:*fn2

Plaintiff BancorpSouth Bank is a Mississippi bank headquartered in Tupelo, Mississippi. Defendant Robert Lynn Hall ("Lynn Hall" or "Hall") is the Chairman and Chief Executive Officer of First Community Bank of the Ozarks. Lynn Hall is also the Trustee of the Robert Lynn Hall Revocable Trust dated August 4, 2004 ("the Lynn Hall Trust").

Hall's wife is Defendant Vicki B. Hall. She is the Trustee of the Vicki B. Hall Revocable Trust dated August 4, 2004 ("the Vicki Hall Trust").

The children of Lynn and Vicki Hall are Robert L. Hall, Jr., Steven Scott Hall, and Nicole Lynn Styant who is the Trustee of the Nicole Lynn Styant Revocable Trust. Robert Hall Jr., Steven Hall, and Nicole Styant as Trustee of the Nicole Lynn Styant Revocable Trust are all Defendants.

Defendant Hunter's Point LLC ("Hunter's Point") is a Missouri corporation with its principal place of business in Branson. Lynn Hall is its registered agent.

Defendant M & L is the sole shareholder of First Community Bank of the Ozarks, a Missouri bank with its principal place of business in Branson, Missouri. Lynn Hall is the Chairman of the Board of Directors of M & L Holding Company ("M & L") and also serves as Chief Executive Officer, Treasurer and Secretary of the company. Vicki Hall is the Assistant Vice President and Assistant Secretary of M & L. Lynn and Vicki Hall are also M & L's sole directors. Steven Hall is the Senior Vice President of M & L.

The Stock Loan

On October 5, 2009, for value received, Lynn Hall as maker executed a promissory note in favor of Bancorp South in the principal amount of $6.8 million. Payment of this loan ("the Stock Loan") was secured by 51,238 common shares in M & L pledged by the Lynn Hall Trust, and 51,238 common shares in M & L pledged by Vicki Hall Trust. These 102,476 shares constituted all of the common stock in M & L.

On February 4, 2010, the Stock Loan matured and all principal and interest outstanding became due and payable. The loan was not paid and is in default. As of September 17, 2010, the principal amount owed under the loan is $6.8 million and the accrued interest and other charges amount to $212,500. Interest continues to accrue on the unpaid principal at $944.44 per day. On March 24, 2010, BancorpSouth made a final demand upon Hall, and he did not pay.

The Working Capital Loan

On October 5, 2009, for value received, Lynn Hall as maker executed a promissory note in favor of BancorpSouth in the principal amount $100,000. Payment of this loan ("the Working Capital Loan") was secured by the M & L common stock and by a deed of trust covering a plot of land known as the Patterson Duck Club, a subdivision of Stone County, Missouri.

On February 4, 2010, the Working Capital Loan matured and all principal and interest outstanding became due and payable. The loan was not paid and is in default. As of September 17, 2010, the principal amount owed under the loan is $100,000 and the accrued interest and other charges amount to $3,125. Interest continues to accrue on the unpaid principal at $13.89 per day. On March 24, 2010, BancorpSouth made a final demand upon Hall and he did not pay.

The Real Estate Loan

On October 5, 2009, for value received, Hunter's Point, through its authorized member, Lynn Hall, executed a promissory note in favor of BancorpSouth in the principal amount $1.49 million. Payment of this loan ("the Real Estate Loan") was secured by a deed of trust covering certain real property located in Stone County, Missouri.

On February 4, 2010, the Real Estate Loan matured and all principal and interest outstanding became due and payable. The loan was not paid and is in default. As of September 17, 2010, the principal amount owed under the loan is $1.49 million and the accrued interest and other charges amount to $46,562.50. Interest continues to accrue on the unpaid principal at $206.94 per ...


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