How can a multi-million dollar company vanish without a legal trace? Apparently it can happen when a CEO wants to ensure that the closely held business is not included among the marital assets in his divorce case.
That is one of many bizarre lessons to be taken from?Rollins v. Rollins,?the traveling divorce show that started in Greenville, South Carolina, and wound up in Shelby County, Alabama--contrary to common sense and all applicable law.
It appears that Ted Rollins, now the CEO of Charlotte-based Campus Crest Communities, did not want a closely held family business to get divided up in his divorce. So he took steps to ensure that his wife, Sherry Carroll Rollins, would flee with their two daughters to Alabama, where she had family. And that's when the company in question disappeared, meaning Ms. Rollins received nothing from a marital asset in which she had a clear legal stake.
We have focused on the jurisdictional change of scenery in?Rollins, a shift that simply could not happen under Alabama law, as expressed best in a case styled?Wesson v. Wesson, 628 So. 2d 953 (Ala. Civ. App., 1993).?That's why?Rollins?stands as the worst case of courtroom abuse I've seen in the civil arena.
But oddities in the case hardly are limited to matters of jurisdiction. The virtual disappearance of a company called St. James Capital, LLC might be the strangest event of all. In fact, court documents indicate that a desire to keep St. James Capital under wraps might have been the reason the case shifted to Alabama in the first place.
I didn't think anything could top the cheat job Mrs. Schnauzer and I experienced at the Shelby Courthouse in Columbiana, Alabama, in a case that started thanks to our difficult neighbor with a criminal record. But I would have to say that Sherry Carroll Rollins can top our tale of legal woe. And who could have dreamed that she would wind up in the same courthouse where we got shafted?
You might say that St. James Capital (SJC) was the forerunner of Campus Crest Communities. Information about SJC is sketchy, but Ted Rollins reportedly started the company with his cousin,?R. Randall Rollins of Atlanta. SJC was a real-estate development company, and as seems to be the case with most Rollins businesses, it apparently involved significant dollars.
Ted Rollins hardly is a financial lightweight. But his cousin, Randall Rollins, is among the heaviest of heavyweights. Randall Rollins is the chairman of Rollins, Inc., the company that operates Orkin Pest Control and a number of other profitable ventures. Randall's younger brother, Gary W. Rollins, is president and CEO of Rollins, Inc.
How profitable are the Rollins enterprises? In 2004, The Atlanta Business Chronicle compiled a list of the city's "Stock Market Superstars." At No. 5 on the list was Gary Rollins, with a stock worth of $584.9 million. Right behind him, at No. 6, was Randall Rollins, worth a cool $546.4 (By the way, the No. 4 spot, just ahead of the Rollins brothers, was occupied by a fellow named Ted Turner--worth $843.3 million.)
The same publication compiled a "Barons of Business" for Atlanta in 2005. Gary Rollins was ranked No. 3 on that list, and his stock wealth had soared to $791 million. Randall Rollins was No. 4, with stock wealth of $763.8 million. The Rollins brothers clearly are among the "1 percent" who have done quite well in the Age of Bush. And they are Ted Rollins' cousins'.
Given Randall Rollins' track record, it's safe to say that a company he formed with Ted Rollins would be pretty successful. So how could that company, St. James Capital, disappear in the middle of Ted Rollins' divorce case?
We still are looking for answers to that question. But court documents make it clear that St. James Capital did indeed vanish while Rollins v. Rollins was litigated over about a seven-year period.
Sherry Rollins started the case in 2001 by filing for divorce in Greenville, South Carolina, where she and Ted Rollins lived with their daughters. What happened next? Here is how we described it in a previous post:
Sherry Rollins had sued for divorce in Greenville, South Carolina, where the family had lived, and adultery was one of the primary grounds she cited. A South Carolina judge had issued a temporary order that called for Ted Rollins to pay $3,355 a month in child support, $5,000 a month in alimony, and continue paying the mortgage, taxes, and insurance on the marital home.When the mortgage went unpaid, Sherry Rollins and her children were forced from their home. Mrs. Rollins fled to Alabama, where her two sons from a previous marriage were living.
Why would Ted Rollins disobey a court order that required him to make sure that Sherry Rollins' right to the "use, possession, and occupancy of the former marital residence" was to remain "undisturbed during the pendency of this action"? The original support order of $8,355 a month was reduced to $4,500 a month, so that must not have been the motive.
Perhaps the answer is found in a contempt order from a South Carolina judge, dated October 17, 2002. (See the full order at the end of this post.) Family Court Judge Robert N. Jenkins Sr. wrote:
I find that Defendant is 40 years of age and in good health. He is employed as President of St. James Capital, LLC, a real estate development company headquartered in Greenville, South Carolina. Defendant testified that the company is involved in a substantial project. Defendant is a graduate of Duke, with an MBA. He lives in his cousin's family compound in the guest house in Atlanta, Georgia, free of charge. He travels, sometimes on private jet aircraft. His family is extremely wealthy. Historically, this family included in their lifestyle funds and benefits provided by Defendant's family, which appear to be available when Defendant wants them for his needs but become unavailable when they are needed for Plaintiff.
Judge Jenkins gave Ted Rollins a pretty stern rebuke, making it clear he was not buying what Mr. Rollins was selling. In 2003, just a few months after this order was issued, Sherry Rollins was forced to flee from her home to Alabama.
By the time Ted Rollins got the divorce case shifted to Shelby County, Alabama, his economic circumstances had mysteriously changed. According to a sworn child-support document in Alabama, Ted Rollins' only income was the $50,000.04 he made working for Reynolds Mortgage Company of Brentwood, Tennessee. There was no mention of St. James Capital.
Ted Rollins's final alimony and child support obligations were based on his declared salary from Reynolds Mortgage, and that's why Sherry Rollins and her two daughters now qualify for food stamps in Alabama.
Under Alabama law, the following items are considered marital assets to be included in the property division of a divorce case:
* Marital home/marital estate
* Vacation home
* Family owned business
* Business investments
* Pension plans
* 401k plans
* Stocks and bonds
* Inheritance
St. James Capital almost certainly would have qualified as a marital asset to which Sherry Rollins had a legal stake. So what happened to the company? Who pulled what strings to make it disappear? In the age of Wall Street greed do corporate types regularly hide their assets in divorce cases? Do big-time law firms, making big-time fees, help them get away with it?
Is it common for this kind of scam to be pulled in Alabama courts? How many citizens in our state fall victim to this sort of judicially sanctioned fraud?
We will be seeking answers to those questions--and more.
Ted Rollins Contempt Order
Source: http://legalschnauzer.blogspot.com/2011/11/ceo-makes-company-disappear-in-midst-of.html
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