Alleging Fiduciary Malfeasance Patterns

1. Financial Mismanagement and Reporting Discrepancies:

   • Significant discrepancies between the assessed values of MRID's personal property and the amounts claimed in financial reports, suggesting inaccurate reporting and potential misrepresentation of assets.

   • Inconsistencies between the 2021 financial report provided to Administrator McDaniel and the annual financial report filed with the county, indicating a lack of transparency and reliability in financial statements.

   • Failure to implement effective internal controls over financial reporting to prevent material misstatements due to error or fraud.

2. Noncompliance with Statutory Requirements:

   • Failure to meet the reporting requirements mandated by Arkansas Code §14-86-2102 for improvement districts, demonstrating a lack of accountability and transparency.

   • Disregard for the legal obligations to provide accurate and timely financial information to stakeholders and regulatory authorities.

3. Breach of Fiduciary Duty:

   • Failure to act in the best interests of the property owners and manage MRID's assets and finances prudently, as required by their fiduciary responsibilities.

   • Allowing the misappropriation of funds, engaging in questionable reporting practices, and prioritizing costly litigation over the maintenance and improvement of community amenities.

   • Neglecting to address and rectify identified issues and discrepancies in a timely manner, despite documentation from Commissioner Watt and previous audit reports.

4. Misuse of Funds for Litigation:

   • Diverting MRID's financial resources towards legal battles and defense costs, instead of allocating funds for the proper maintenance and enhancement of amenities owned by the property owners.

   • Failing to give due regard to the financial impact of prolonged litigation on the MRID's ability to effectively serve its intended purpose and the interests of the property owners.

5. Lack of Transparency and Accountability:

   • Withholding or delaying access to pertinent records, accounts, financial documents, and contracts, hindering the ability of stakeholders to assess the true financial state of the MRID.

   • Disregarding repeated requests for information and clarification regarding financial discrepancies and managerial decisions.

   • Fostering a culture of secrecy and unresponsiveness, undermining public trust and impeding efforts to hold the commissioners accountable for their actions.

6. Violation of the Trust Agreement:

   • Failing to transfer the amenities into the trust as required by the Trust Agreement between MRID and the bankruptcy trustee of Horseshoe Development Corporation.

   • Omitting the reverter clause from the deeds of the amenities, thereby eliminating the grantor's ability to reclaim control of the properties in case of mismanagement or breach of trust.

   • Creating ambiguity regarding the legal ownership and control of the amenities by titling the assets solely in the name of MRID without reference to the trust.

This alleged pattern of misconduct and malfeasance by the MRID commissioners paints a picture of systemic failings in financial management, legal compliance, fiduciary responsibilities, and transparency.

The cumulative effect of these actions has jeopardized the financial stability of the MRID, eroded public trust, and undermined the effective governance and improvement of the amenities for the benefit of Horseshoe Bend property owners.