National Timber Partners was ordered to pay $16.5 million to the Arkansas Public Employees Retirement System, Little Rock, for breaching a contract with the $7.3 billion pension fund.
The Arkansas attorney general, who serves as legal counsel for pension fund, filed suit in Pulaski County Circuit Court, Little Rock, on Sept. 27 after the timber manager failed to pay a scheduled $15 million installment to the pension fund that was due June 28. He filed a motion for default judgment earlier this month.
APERS sold its stake in NTP Timber Plus Fund I to the manager in October 2012 to be paid in three installments totaling $110 million. Carlos Borromeo, APERS chief investment officer, said National Timber executives approached the pension fund about buying the fund stake back when they were concerned they could not live up to their projected returns. APERS committed $100 million to the fund in April 2006 with the goal of a 10% annual return on the investment.
National Timber paid the first installment of $85 million and a portion of the $15 million second installment. A final installment of $10 million due Dec. 31 was never made, according to a news release from Attorney General Dustin McDaniel. National Timber was ordered to pay $562,000 in prejudgment interest as part of the $16.5 million total, according to the news release.
Officials from National Timber could not be reached for comment.
