Mid-Missouri sues developer to recoup loan deficiencies

Mid-Missouri Bank filed the lawsuit against Major Hammett II, wife Lisa and business partner Wendy Green in Polk County Circuit Court in late June, although the defendants had not yet been served as of Aug. 7.

According to the petition, Mid-Missouri made several loans to Hammett starting in late 2004. The bank claims in the suit that Hammett obtained the loans by misrepresenting his ownership stake in various companies and submitting fraudulent documents, including falsified deeds of trust, as proof of collateral.

Hammett’s point of contact at Mid-Missouri was Prentice Hancock, a loan officer who left the bank in September 2006. Last month, Missouri Division of Finance Commissioner Eric McClure issued an order banning Hancock from ever working for a state-chartered banking, savings or trust institution. (See this week’s cover story, “Prohibition orders flowing into Ozarks.”)

Lee Keith, Mid-Missouri’s new president and CEO, said he knew very little about the Hammett-Hancock relationship or its fallout, but he voiced support for traditional lending practices.

“In lending, when you underwrite a credit, part of the evaluation of underwriting is just doing due diligence to verify all the information,” he said, adding that Mid-Missouri has strong anti-fraud policies in place.

Tracking the suit

In 2006, Mid-Missouri agreed to loan PEH Construction LLC – a company co-owned by Hammett – up to $5.8 million to build Springhill Falls apartment complex on South Lillian Avenue in Bolivar. The finished complex comprises four buildings with 68 apartments and about six townhouses, said Bolivar Zoning Administrator Sarita Cain.

During negotiations, Hammett allegedly presented a $400,000 promissory note from Michael Atcheson and Larry Haas, secured by a deed of trust filed by PEH Construction, court records show. Mid-Missouri, however, claims in the suit that the documentation was fraudulent because Hammett lacked the authority to pledge the property as collateral on the construction company’s behalf.

According to the suit, Hammett allegedly misrepresented himself as the executive member of PEH – a title that actually belonged to Robert Parsons of Bolivar.

After PEH Construction defaulted on the loan, Mid-Missouri liquidated the collateral but was left with a deficiency balance of nearly $573,000, records show.

In 2005, Mid-Missouri also loaned an undisclosed amount to Brett Horn LLC for the development and construction of homes near Southwest Baptist University in Bolivar.

Hammett and Brett Horn LLC co-owner Wendy Green – also a defendant in the lawsuit – allegedly presented fraudulent documentation to convince bank officials that a second deed of trust existed for the real estate. Mid-Missouri, in turn, unknowingly approved a 100 percent loan, on which Hammett later defaulted. After liquidating collateral, the deficiency balance on the loan was about $103,000, records show.

Jason Raikos, Mid-Missouri’s general counsel, said the residential properties developed by Hammett are still bank-owned, but he declined to comment further about the suit. Raikos did confirm that Bolivar branch President Randall Sudbrock, who was Hancock’s superior, is still employed by Mid-Missouri.

Hammett’s Kansas City attorney, Phil Goodin, said he planned to file a response denying the bank’s allegations once his client is served with the suit. Goodin, with Spencer Fane Britt & Browne LLP, said he’s also exploring the possibility of filing a counterclaim against Mid-Missouri.

“There’s another side to this story that’s going to come out in due time,” Goodin said, declining to elaborate.

Who is Major Hammett II?

Hammett also is engaged in a pending lawsuit he filed in March against note holders Haas and Atcheson in Jackson County Circuit Court. Goodin declined to disclose the nature of Hammett’s relationship with Atcheson and Haas, who are principals of Lee’s Summit-based commercial real estate firm CEAH Realtors.

Hammett and Atcheson were the original organizers of Simon Square Development LLC, the company behind the $90 million Simon Square mixed-use development under way along State Highway 13 in Bolivar. Water and sewer installation for the 62-acre first phase is complete, and street work is ongoing, said Cain, the zoning administrator. Plans for Phase II of the 152-acre development are in the works, she added.

Hammett, however, is not on the board of directors for Simon Square Business Owners Association Inc. – a nonprofit corporation formed in April. According to documents filed with the Missouri Secretary of State’s office, the board consists of Atcheson, Haas and Todd Messerli, a project manager with CEAH Realtors.

At one time, Hammett was president and principal executive officer of Missouri Development Co. Inc., a Nevada-based company formed in August 2001 to develop properties in the Kansas City metropolitan area, according to Securities and Exchange Commission filings.

Hammett received a bachelor’s degree in business from Missouri State University in 1991 and founded Major Saver Fundraising Inc. three years later, according to the SEC filings. Major Saver provides fundraising tools for schools, nonprofit organizations and businesses, according to www.majorsaver.com.

A woman who answered the phone at the Major Saver Foundation in Lee’s Summit said Hammett was “let go” in December.