Jackson Jambalaya

JJ conducted a review of the loans issued to Evans-controlled companies in Texas. JJ calculated approximately $27 million in commercial real estate loans were issued by Texas banks and two Mississippi banks after reviewing deeds of trust. 19 loans were issued, 11 are now in foreclosure. The loans now in foreclosure proceedings are calculated to be $16,488,370 as more notes go unpaid. When the original post was made about the loans in Texas, only $12 million were in foreclosure.

See sidebar for a collection of all posts on the Evans case.

This post will be short and I'll write more later.

There was a hearing in Bankruptcy Court today as a sea of gray suits flooded the courtroom. Here are some quick notes taken during the proceedings:
*The judge stated he will probably order all of the "parent" tracts of land sold and then work out how to split the proceeds of each sale among the banks claiming liens on portions of each tract.
*MVT caved against most motions or responses filed against it by the trustee, Derek Henderson, Cadence Bank, and the Kristi Johnson Group: State Bank, First Bank, Bank of Forest County, & Holmes County Bank
*Judge Olak and Mr. Henderson stated that the entire action in Madison County Chancery Court will be removed to the Bankruptcy Court in the next few days
*Neither Evans brother appeared in the courtroom.
*Mr. Renfroe of Merchants & Planters Bank provided the comedic moment of the day when he attempted to foreclose on a property even though 1. His bank had second lien on the property, 2. the value of the property was less than the amount of either lien, 3. The property was cut in two by a gas line and had no access, and 4. He had no clue what the value of the parent tract was or who the other banks involved were. In effect, the property was almost worthless without any access.
*MVT dropped its "emergency" attempt to conduct its own examination of Mr. Evans finances and the assets and liabilities involved. Instead two examinations will be held that are open to all of the creditors.
*No title insurance claims were addressed.

Synopsis of Evans case: Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.


Apparently Mississippi Valley Title Insurance Company is now fighting a three-front war in the bankruptcy case of Chris Evans. Mississippi Valley Title filed an Emergency Motion for a Rule 2004 Examination of Debtor on November 16 seeking an examination on November 20, 2009. Under Rule 2004, the Court may order an examination of "the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." Federal rules of bankruptcy

Mississippi Valley Title claims in its motion that Chris Evans filed bankruptcy as a delaying tactic against the lawsuit alleging fraud Mississippi Valley Title filed against him in Madison County Chancery Court. MVT argues "Debtor is also the subject of a criminal investigation by the FBI and other investigative government bodies for Debtor's fraudulent conduct. Based upon this criminal investigation, Movant expects that Debtor will likely exercise his Fifth Amendment rights and refuse to answer any questions in the Rule 2004 Examination. It is imperative that Movant determine if that is the Debtor’s position because it will be necessary for the Debtor to be granted immunity under Section 344 of the Bankruptcy Code prior to the first meeting of creditors now scheduled for December 9, 2009. Otherwise, the Debtor will have succeeded in further delay of investigation into his fraudulent content."
Copy of motion

Derek Henderson, the trustee appointed for the case, stated he had no objection to an examination and that "such an examination will ultimately be required". Unfortunately for MVT, Henderson states he "fails to see the emergency nature of the motion" and provides several reasons to support his position. Copy of Trustee's response

The trustee also attempts to stop Mississippi Valley Title apparent attempt to use the 2004 motion to settle the title issue for the properties allegedly used by the Evans brothers to perpetuate their fraud. This is crucial because many loans were issued by 32 banks in Mississippi on properties in Madison and Desoto Counties owned by the Evans brothers. In most cases the certificate of titles issued to Mississippi Valley Title and the lenders by Charles Evans, Jr., were said to be fraudulent, thus leaving the banks with no collateral and MVT at risk of paying millions in dollars in claims to the lenders. In many cases, the same tract of land had multiple loans issued on it by several banks that had no knowledge of the other loans. Thus, the title issue is very important to everyone involved in this case. The banks thus have a strong interest in an examination or court determining who has title to these properties and aren't going to be too crazy about an sudden examination held in their absence.

Mississippi Valley also asked the Court to to meet with MVT in the Examination and fix the title problems on the properties at issue in this case. MVT stated it "has also requested Debtor, both individually and in his capacity as an officer, manager, or member of various entities, to execute curative real property deeds in an effort to merge equitable and legal title."

The Trustee said he would oppose any such action by Evans and that it would "only cause possible adversary proceedings in the bankruptcy case as to preferences and/or fraudulent transfers.' (Translation: Some banks are going to see this as a power play to screw them and we aren't going to go there.) The Trustee asserts that it is better to leave the property issues at status quo until a complete investigation can be done..." Mr. Henderson warned MVT he would take this position in a letter dated November 9, 2009. Copy of letter It should be noted Cadence Bank filed a joinder petition with the Court supporting the Trustee's action.

Several banks filed objections to some of the motions filed by Mississippi Valley Title and other banks. Mississippi Valley filed a motion on November 6 asking for permission to pursue its fraud lawsuit against Chris Evans in Madison County Chancery Court. Copy of motion. First State Bank, Bank of Forest, Holmes County Bank, and State Bank & Trust objected to this motion on November 17, Copy of objection, and argued the bankruptcy court should decide this matter, not the state court.

Its not hard to see why the banks are objecting to Mississippi Valley Title's request that it be allowed to pursue the fraud case against Chris Evans. MVT requested the Chancellor appoint a Special Master to preside over the case which would in effect replace the Trustee in all but name only. The banks as creditors have more rights in the bankruptcy court and are able to file their own claims and motions. If the Court grants permission to MVT to proceed with its case against Chris Evans, the banks are reduced to the role of cheerleaders hoping Mississippi Valley Title is looking out for their interests in state court unless they intervene. It should also be pointed out that in bankruptcy court the Trustee has powers not available to the Special Master and can also prosecute bankruptcy fraud if discovered. It is pretty clear to see why some of the banks are not to comfortable with MVT's attempt to have the case removed back to state court.

These banks also objected to Mississippi Valley Title's emergency request for a Rule 2004 examination. They argue an examination should be held but it should be at a time and place where all of the banks have an opportunity to participate if they so desire. Copy of objection to 2004 motion

Cadence Bank also jumped into the fray, filing its own motion opposing Mississippi Valley Title. Cadence claimed it had $4.6 million at stake and that it couldn't understand exactly why Mississippi Valley Title was trying to force an examination so quickly and without the other banks present. Cadence agreed with State, First State, Holmes, and Forest and asked the Court to order an examination "far enough in the future" so all interested parties could participate. Copy of Cadence's objection to 2004 motion

There is one further issue that should be considered. Has Mississippi Valley Title actually paid any claims? The insurance company stated 65 claims worth over $41 million were filed against it by policyholders affected by the Evans case. In his motion to dismiss, the lawyer for Charles Evans, Jr., argues Mississippi Valley Title has suffered no harm and can't sue for suspected "future" injury. A fundamental rule is that before a party can recover for damages, it must first show injury to the court. MVT has not stated how much money it has paid in claims, if any. So the question must be asked if Mississippi Valley Title has actually paid any claims so far in the Evans case.

The Evans-izer Bunny, it just keeps going....and going.... and going....

See sidebar on right side of page for a collection of all posts on Evans case

Copy of affidavit
Exhibit A: Itemized list of loans issued to Evans brothers filed by MVT
Exhibit D: copy of title certificate issued to MVT
Exhibit E: Copy of title certificate issued to MVT

Mississippi Valley Title Insurance Company filed the affidavit of Brad Jones in the bankruptcy case of Chris Evans on November 17. The affidavit provides the testimony of Brad Jones, an employee of MVT who provides specific details on how Charles Evans, Jr. and Chris Evans allegedly perpetuated a fraud upon Mississippi Valley Title and many banks. Mississippi Valley also reveals that claims in excess of $41 million have been filed against it by affected lenders.

Mr. Jones is a lawyer, CPA, and certified fraud examiner. Mr. Jones states Charles Evans, Jr. was "an approved attorney for Mississippi Valley Title, although not retained, hired, or employed by Mississippi Valley Title." MVT and its lawyers have consistently pointed out this fact at every step of this case. Evans was authorized to "provide title certificates to MVT".

A title certificate is important when obtaining a loan on a property. The certificate allows the borrower to show the bank he is indeed the true owner of the property and also tells the bank there are no other liens on the property. If liens are missed, either the title insurance company has to pay them (the lienholders had a valid claim on the property when it was sold, and thus the proceeds of the sale) or the bank finds out it doesn't have the first lien on the property (thus it may be unable to recover the loan if the borrower defaults). This is important as banks will not provide a loan on property unless there are no other liens, or the other lienholders have agreed in writing to subordinate their claim to that of the bank.

The most crucial part of the affidavit states Chris Evans, Charles Evans, Jr., "and others entered in concert in a fraudulent and/or criminal scheme to defraud MVT and Lenders by borrowing funds from Lenders using certain land as collateral when title to the collateral was not of record in the landowner."

"As a part of the fraudulent scheme.. (the Evans brothers) would misrepresent to the Lenders and MVT that the land was owned by an entity controlled by Jon Christopher Evans and/or Charles H. Evans, Jr."

Crucial because without the issuing of phony title certificates, such a scheme would not work as banks would not lend money and MVT would not issue insurance policies. Jones testifies "based upon the false title certificates... and title insurance commitments issued by Mississippi Valley Title, Lenders would advance funds to Jon Christopher Evans, Charles H. Evans, Jr., and/or others."

The other crucial point about this case is that "contrary to representations made by Charles H. Evans, Jr., in title certificates, record title to the subject property was never transferred into the entity that actually borrowed the funds and whose title was insured."

In plain English, Mr. Jones is stating that one Evans company would buy a tract of land, another Evans company would borrow money on it, but the company that bought the land never transferred the land to the company that borrowed the money. However, the title certificate issued to the bank and MVT said it did own the land even though in reality the other company did.

A simple analogy would be suppose I took your car and got a loan on it from a pawn shop. The pawn shop asks me for a copy of the title so I give them one I forged. Unfortunately for them, the title is still in your name but they don't know that little fact. I get money on the car, don't pay back the loan, then the pawn shop finds out its not my car and can't repossess it.

Mississippi Valley stated in Exhibit A (listed above, compare it to this earlier post) that as of November 17, 2009, lenders have filed 65 title insurance claims with Mississippi Valley on loans granted because Charles Evans, Jr. issued (allegedly) phony title certificates. Mississippi Valley states the total amount of the claims is $41,415,242 (JJ estimated the banks exposure in Mississippi at $47 million. Not bad.) Paying these claims will wipe out much of Mississippi Valley's claims reserves. However, Old Republic, its parent company, has reserves of several hundred million dollars and is able to cover any claims Mississippi Valley must pay. Old Republic Q3 earnings statement

The affidavit also lists several large tracts purchased by an Evans company in Madison County: 38 acres on Highland Colony Parkway and 84 acres on Park Place Boulevard. It is also important to note that not all loans were gained through fraudulent title certificates and that the banks losses are probably larger than the amount stated by Mississippi Valley, as the assets of Charles H. Evans, Jr. are frozen and Chris Evans is in bankruptcy, thus the remaining loans will probably enter into default. It is also worth remembering Texas banks issued approximately $27 million in loans as well and that nearly half of these loans are now in foreclosure. The Evans case is like the Energizer Bunny.... it just keeps going...and going.... and going.

Update II: Found a $3.3 million dollar loan issued by M&F to an Evans company. Totals and headlines are updated to reflect this new information. Copy of Deed of Trust JJ was informed by a very good source M&F's exposure is only $5.6 million, which could be covered by MVT.

Update I: Found more loans extended to Evans' owned companies in Desoto County. JJ calculates the total amount for Desoto is nearly $10 million after examining public records. List has been updated to reflect Desoto County loans.

One question that must be asked of the Evans case is exactly how much money did banks lend to the various companies owned by the Evans brothers. While the lawsuits against Jon Evans, Jackson Attorney Charles Evans, Jr., and their twenty-five companies work their way through the courts, JJ did some digging on the Madison County website and examined deeds of trust issued by the Evans' entities in favor of the local banks (A deed of trust is issued to a lender for the lien placed on the property. Think of it as a receipt for a loan filed at the courthouse.). Earlier post on Evans case

The total amount of loans issued to the Evans' companies in Madison County alone is $37,538,645 according to calculations based upon public records. There were 67 loans issued by 27 banks in Madison County. This is not an all-inclusive list but is based upon companies named in the lawsuit filed by Mississippi Valley Title Insurance Company in Madison County Chancery Court. An attempt was made to mention all releases filed by the banks on the deeds of trusts. If any were missed, please feel free to email any corrections to JJ. There are rumors of the defendants perpetuating similar frauds in other areas. However, those are just rumors at this time and JJ has focused its efforts on Madison County.

Several banks got lucky as they issued loans that were subsequently paid off on time. Others weren't so fortunate. Merchants & Farmers Bank is probably the biggest loser as its estimated the Kosciusko bank issued over $5 million in loans to companies owned by Jon or Charles Evans., Jr. While most of these loans are still performing and no actions pertaining to foreclosure have been filed, it is important to keep in mind that there is an active court order that froze the assets of the defendants. Unless the Court approves any mortgage payments, all of these loans are probably in severe danger of default. Below are the loans as well as the dates they were closed or filed, and the Evans company to whom they were granted.

Bankfirst: $1,688,828 (Madison), $2,489,246 (Total)
$448,408 on 7/3/03 to Woodgreen Development.
$480,420 on 11/14/03 to Old Agency Business Park
$760,000 on 1/7/05 to Cedar Lake Investors
$800,418 on 8/4/04 to Snowden Lane Investments. (Desoto)

Bancorp South: $2,978,081 (Madison), $4,333,666 (Total)
$448,000 on 7/3/03 to Woodgreen Development. Extended through 2013.
$250,000 on 1/15/03 to Colony Construction.
$780,000 on 1/7/05 to Cedar Lake Investors.
$1,500,081 on 7/21/08 to Park Place Commons. Was due in October 2008. No release or modification filed so assumed note is still unsatisfied.
$800,000 on 8/5/04 to Snowden Lane Investments. (Desoto)
$555,585 on 9/22/08 to Snowden Lane Investments (Desoto)


Regions: $1,961,020
$481,020 on 7/9/03 to Woodgreen Development. (Union Planters loan)
$1,480,000 on 3/9/05 to Cedar Lake Investors

Bankplus: $1,295,533 (Madison), $2,034,173 (Total)
$480,068 on 7/7/03 to Woodgreen Development.
$248,810 on 1/14/03 to Colony Construction
$183,695 on 1/15/08 to Colony Construction. Extension of above note.
$631,770 on 1/7/08 to Cedar Lake Investors
$400,518 on 8/20/04 to Brashear Heath (Desoto)
$338,122 on 8/25/06 to Colony Construction (Desoto)

Merchants & Farmers: $8,663,769 (Madison), $9,993,667(Total) NOTE: Informed source tells JJ only $5.6 million in loans are outstanding for the bank. Totals will be changed to reflect it in the overall cumulatitve total.
$321,618 on 7/23/03 to Woodgreen Development. Released on 4/28/05
$3,037,276 on 7/18/08 to Town Park of Madison.
$1,380,529 on 4/12/07 to Madison Avenue Development
$792,359 on 1/7/05 to Cedar Lake Investors
$416,329 on 9/21/05 to Cedar Lake Investors
$713,023 on 2/23/08 to Snowden Lane Investments. Mod. of earlier loan. (Desoto)
$616,875 on 8/14/07 to Snowden Lane Investments (Desoto)
$3,037,276 on 7/18/08 to Town Park.

Bank of Forest: $1,747,950
$1,296,500 on 7/21/08 to White Oaks Investments
$451,450 on 8/27/09 to White Oaks Investments

Bank of Yazoo City: $1,100,301
$800,188 on 1/29/08 to Westwoods Investments
$300,113 on 3/30/09 to Windsor Pass

Bank of the South: $700,680
$700,680 on 2/15/08 to Westwoods Investments

Renasant Bank: $1,381,150
$780,950 on 3/28/08 to Westwoods Investments
$600,200 on 6/29/07 to Madison Avenue Development

Heritage Banking Group: $781,980
$781,980 on 7/21/08 to Twinbrook Run Development

Southtrust Bank: $837,900 (Madison), $1,237,900 (Total)
$609,439 on 10/17/03 to Old Agency Business Park
$228,461 on 1/3/03 to Highland of Ridgeland. Extended maturity date to 9/13/09.
$400,000 on 8/31/04 to Colony Construction (Desoto)

Community Bank: $2,830,315 (Madison), $3,630,315 (Total)
$464,057 on 10/17/03 to Old Agency Business Park
$776,129 on 11/15/06 to Madison Avenue Development
$720,000 on 1/7/05 to Cedar Lake Investors
$520,129 on 8/1/07 to 463 Development.
$350,000 on 4/11/03 to Highland of Madison Development
$800,000 on 8/4/04 to Snowden Lane Investments. (Desoto)

Madison County Bank: $724,678
$400,164 on 10/16/03 to Old Agency Business Park
$227,899 on 11/13/08 to Old Agency Business Park. Extension of above loan.
$496,779 on 1/7/05 to Cedar Lake Investors.

State Bank & Trust: $2,446,181
$528,025 on 10/17/03 to Old Agency Business Park
$291,342 on 6/17/09 to Old Agency Business Park. Extension of above loan.
$353,079 on 9/23/05 to Cedar Lake Investors
$1,302,914 on 8/30/07 to 463 Development.
$498,846 on 4/10/03 to Highland of Madison Development

Citizens National Bank: $1,212,349
$500,170 on 11/14/03 to Old Agency Business Park
$712,179 on 1/7/05 to Cedar Lake Investors

First Commercial Bank: $0. Zero. Nada. Zip. Zilch.
$525,000 on 10/16/03 to Old Agency Business Park. Satisfied in 2006.
$304,000 on 5/2/03 to Highland CE Corp. Satisfied and released.

National Bank of Commerce: $1,360,441
$600,200 on 10/17/03 to Old Agency Business Park.
$760,241 on 1/7/05 to Cedar Lake Investors

Britton & Koontz: $2,352,102
$643,211 on 10/16/03 to Old Agency Business Park. Extended on 6/17/09 to 2012
$804,231 on 1/7/05 to Cedar Lake Investors.
$904,660 on 4/25/08 to Brashear Heath LLC. Granted extension on 6/17/09.

Holmes County Bank & Trust: $1,580,479
$800,292 on 2/11/09 to Nottaway Pointe
$780,187 on 4/22/08 to Park Place Commons

Cadence Bank: $3,439,402
$1,000,0279 on 10/27/06 to Madison Avenue Development
$1,614,402 on 12/08/06 to Madison Avenue Development. Does not say if it is modification of above note so it must be assumed it is another note.
$825,000 on 9/3/08 to Clear Creek Development.

Consumer National Bank: $792,169
$248,467 on 1/16/03 to Highland of Ridgeland
$191,702 on 2/1/06 to Highland of Ridgeland. Modified several times.
$352,000 on 9/23/05 to Cedar Lake Investors

Omnibank: $2,017,102
$775,804 on 2/2/07 to Madison Avenue Development.
$740,769 on 3/14/07 to Madison Avenue Development. Must be assumed another note as no modification of earlier note is mentioned.
$500,529 on 1/6/05 to Cedar Lake Investors

Copiah Bank: $0. Nada. Zilch. Zero.
$1,000,000 on 6/9/03 to Highland Development Group. Released later that year.

First Bank: $416,167
$416,167 on 1/6/05 to Cedar Lake Investors

Merchants & Planters Bank: $266,000
$266,000 on 4/11/03 to C&L Inc. Substitute Trustee notice filed on 10/15/09.

Guaranty Bank & Trust: $1,617,401
$808,304 on 12/29/08 to Brisbane Centre
$809,097 on 6/12/09 to Brisbane Centre

Wachovia: $900,000 (Madison), $1,300,000 (Total)
$900,000 on 4/30/08 to Park Place Commons
$400,000 on 8/31/04 to Highland of Ridgeland (Desoto)

Patriot Bank: $500,000 (Desoto)
$500,000 on 7/22/05 to Cedar Lake Investors

First State Bank : $752,640 (Desoto)
$424,319 on 6/17/05 to Cedar Lake Investors
$328,321 on 6/27/08 to Cedar Lake Investors

First Security Bank : $1,300,226 (Desoto)
$900,165 on 4/28/08 to Brashear Heath
$400,061 on 6/27/05 to Cedar Lake Investors

First Alliance Bank : $1,520,000 (Desoto)
$1,520,000 on 11/1/07 to Snowden Grove Investors. Modification of three earlier loans.

1st Trust Bank : $380,000 (Desoto)
$380,000 on 11/5/04 to Snowden Grove Investors

$37,538,645 (Madison County)
$9,722,219 (Desoto County)
$47,260,864 (Total)

68 loans in Madison County, 17 in Desoto.
Average loan size: $624,906
32 banks