Worst 1-2 Banking News
The Lex Golden family steered a second bank holding company into bankruptcy court in July. The Chapter 11 filing for Allcorp Inc., parent company of Community State Bank in Bradley (Lafayette County), was followed two months later by regulators taking over Allied Bank of Mulberry (Crawford County).
The insolvency of Allied came 30 months after the Goldens took the $66.3 million-asset lender’s parent company, Acme Holding Co., into bankruptcy court.
Best Corporate News
Bank of the Ozarks Inc. announced the start of a new Little Rock corporate campus to accommodate its growing staff to support its expanding operations.
First-phase construction of a 180,000-SF building will nearly triple its existing office capacity. Occupancy at the current 92,000-SF headquarters was forecast to max out at 269 next year.
Worst Fraud Prosecution
The U.S. attorney’s office couldn’t prosecute a dead man, so they tried to convict his underlings. That was the backdrop for the government’s unsuccessful case against former One Bank executives Michael Heald and Brad Paul.
With the March 2013 death of One Bank’s owner, Layton “Scooter” Stuart, Uncle Sam went after his executive team.
The government went ahead with an unconvincing case against Heald and Paul after the duo refused to buckle to plea bargain pressure while maintaining their innocence and cooperating with prosecutors.
Ironic twist: Uncle Sam granted immunity to the man who most helped Stuart operate One Bank as his own personal piggy bank: Tom Whitehead, former chief financial officer.
Former Senior Executive Vice President Gary Rickenbach pleaded guilty to a much reduced charge of failing to report a crime and drew a sentence of probation. Only Alberto Solaroli, the Florida resident whose fraudulent $1.5 million loan from One Bank was the basis for all the charges, went to prison and only for a year.
Best Restaurant Resurrection
That looks to be Stoby’s, the beloved Conway restaurant heavily damaged by fire in March. The restaurant was razed, and now David Stobaugh, who owns the restaurant with his wife, Patti, is rebuilding at the same site and hopes to be open in spring 2017. Facebook reactions to the fire revealed heartbreak: “Will there be a chance to give back to Stobys? As in volunteering help to clean up, remove debris, etc.? If so, please post. I would volunteer in a heartbeat.”
Best Preview
Months before her use of a private email server contributed to Hillary Clinton’s presidential loss, journalist Ernest Dumas summed up her most persistent damaging trait.
“She always said things were nobody’s business,” Dumas told Arkansas Business, linking her “obsession” with privacy and secrecy to imbroglios that plagued her starting in her days as Arkansas’ first lady. Whitewater, Travelgate and the stolen emails were all examples of secrecy-related woes.
Dumas had examined the Rose Law Firm files on Madison Guaranty Savings & Loan, the thrift that failed under Jim McDougal in 1989. Madison became an issue in Bill Clinton’s 1992 campaign and a subject in the Whitewater investigation later.
“I saw all those records at the Rose Law Firm, and there was nothing there to be secret about,” Dumas recalled. “Maybe she was embarrassed for people to know the piddling little stuff she was doing for her legal fees.”
Worst Mix Heard on Air
After years of reporting on the Razorbacks, sportscaster Aaron Peters resigned from KNWA-TV in Rogers and KARK-TV in Little Rock in October after saying he had mixed prescription medication with alcohol and appeared briefly on the air.
Peters announced his resignation in a posting on Facebook, saying he had been “asked to step down.” On Oct. 12, he was seen briefly as the sports segment began, slurring his words and seeming intoxicated. The cameras cut away, and Peters said on his video post that he had “made a poor, poor judgment decision,” mixing prescription medication with alcohol between shows.
Peters concluded that it was time “to ponder what to do with the next chapter of my life.”
Best Political Activist
David Couch is a Little Rock lawyer who’s the force behind a number of voter initiatives in Arkansas that have sought to liberalize state law. Among them is this year’s successful Arkansas Medical Marijuana Amendment, which voters approved Nov. 8 by a margin of 53 percent to 47 percent. “The initiative is pure democracy,” Couch says.
Worst Source
Jason Shelby told a remarkable tale. He served 17 years in the Army, was shot three times in Afghanistan and was helped through recovery by driving for the ride service Uber. As odd as it sounds, the Bentonville resident told Arkansas Business in May, the first ride he gave was to a University of Arkansas student from Afghanistan, and the rider’s warm thanks for Shelby’s service had eased his anxiety. “From that point, I knew I was going to be OK.”
He went on to earn a master’s degree at UA, he said.
The only trouble is that the Army could find no record of a veteran by Shelby’s name with such a war record, and the UA could find no record of a degree being awarded to him. Shelby stood by his account of his service, but did not protest after an editor’s note on the discrepancies was published.
Worst Argument
Even Dennis Smiley Jr. rejected his own lawyer’s attempt to blame his victims during his sentencing hearing in January after pleading guilty to bank fraud.
W.H. Taylor of Fayetteville had argued for leniency in a sentencing memorandum by saying that banks should have been more vigilant in preventing Smiley’s scheme, which amounted to 55 fraudulent loans for approximately $6.3 million. U.S. District Judge P.K. Holmes III called it a “somewhat incredulous argument” and Smiley took full responsibility for his crime on the stand.
Holmes sentenced Smiley to 97 months in prison.
Best Buyback
John James started his career as an entrepreneur with Scrub Shopper, an online seller of medical apparel.
Scrub Shopper became one of several subsidiaries under Acumen Brands, the online retail company James founded in 2009. James left Acumen Brands in 2015 to start Hayseed Ventures, which partners with startup companies to help them become successful businesses.
In March, James bought Scrub Shopper back from Acumen Brands for at least $1 million — James declined to give the exact price. James hopes the still-profitable Scrub Shopper will be the foundation for Hayseed’s growth.
“We want to be the largest reseller of scrubs in the world,” James said. “That’s not a joke. That’s literally our plan.”
Worst Turnover
Dallas Cowboys running back Darren McFadden sued his former family friend and financial adviser, Michael Vick of Pulaski County. The Arkansas Razorbacks’ former star running back had given power of attorney to Vick. That decision backfired. McFadden, in the lawsuit, accused Vick of “gross incompetence, self-dealing and outright theft” of more than $15 million. Vick, who shares his name with a former NFL quarterback, has denied the allegations. The case is pending.
Best Startup Price
Wal-Mart Stores Inc. said in August it would spend $3.3 billion to buy the startup online retailer Jet.com of Hoboken, New Jersey.
Launched in 2015, Jet.com was a members-only online marketplace that was founded by Marc Lore, who was a co-founder of Quidsi, which is the parent company of Diapers.com. When Wal-Mart announced the purchase, few people had ever heard of Jet.com. Some retail watchers, though, praised the move and predicted it would be the spark the Bentonville retailer needs to boost its online sales. Others weren’t so sure. “It looks very irrational and desperate,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York.
Worst Exit Strategy
Three middle-aged women who had all worked for First National Bank of Lawrence County for decades smuggled out almost $4 million in cash between 2005 and 2015, covering up the shortage with timely transfers that depended on advance notice of routine audits. The only plan for getting away with it was apparently the suicide of one, who would then be blamed by the surviving conspirators — but her suicide attempt failed.
Peggy Sutton, Brenda Montgomery and Cindy Tate all received 51-month sentences after pleading guilty to bank fraud in U.S. District Court and were each ordered to pay $1.3 million in restitution.
Best Lawyering
U.S. District Judge Kristine Baker sentenced Montgomery and Tate to 57 months in prison for their embezzlement, and Sutton would have received the same sentence had her lawyer, Tim Dudley of Little Rock, not questioned a discrepancy between the plea agreement with federal prosecutors and the pre-sentencing report by the federal probation officer.
As a result, Sutton got a 51-month sentence and Baker similarly reduced the sentences for Montgomery and Tate.
Worst Transparency
When she was running for state auditor in 2014, Andrea Lea said, “Transparency should be the foundation of any public office.” But that was before she was sworn in.
While Arkansas Business was reporting on Lea’s granting of a no-bid contract to inexperienced, overpriced lawyers recommended by campaign contributor John Goodson, one of her former staff members alerted a reporter to the existence of emailed notes about staff meetings with lawyers who wanted the job.
Those emails had not been produced in response to the first Freedom of Information Act request because George Franks, Lea’s chief of staff during her first six months in office in 2015, took the notes and sent them from his personal email address to her personal email address, as she requested.
The emails were then released, and Arkansas Business reported assurances by spokesman Skot Covert that Lea used her personal email very little. That prompted Franks to produce text messages in which Lea repeatedly instructed him to use his private account to send emails about official state business to her private email address — instructions that continued for months after she took office in January 2015.
After those text messages surfaced, Lea said in an email to Arkansas Business, “I made a statement I believed was accurate but based on the texts, it appears I misspoke. … Moving forward, I am implementing a new communication policy for the office to avoid any appearance of impropriety.”
Best Cautionary Tale
On one side of a dispute is an ex-con who said he was attempting to improve his life. On the other side is a couple who went to his church. Both Mike and Gina Fullerton and ex-con Kristian Nelson claim to have been victimized by the other.
The dispute centered on Pinnacle Valley Road west of Little Rock, where Nelson grew up and the Fullertons live now, and where the three hoped to turn a former yoga studio into a restaurant and build an office building next door. The Pinnacle Valley Restaurant opened in 2015, but the office building never got past the slab.
Nelson sued the Fullertons and alleged they used his status as a convicted felon to keep him from getting an ownership interest in their joint business venture. The Fullertons denied the allegation and sued Nelson for filing a false lien. Both cases are pending.
Worst Halftime Speech
We don’t know what Bret Bielema and his coaching staff told the Arkansas Razorbacks while in the locker room with a 24-7 lead over the Missouri Tigers on Nov. 25.
Whatever the gridiron spiel, it should be banished from his playbook, never to be uttered again.
The worst team in the SEC East (2-6 and 4-8 overall) went on to win 28-24 when the Hogs failed to score in the second half.
Perhaps committing the halftime speech to paper with a cathartic burning and burial ceremony is in order.