As the billionaire chairman of Atlanta-based Rollins Inc. and Orkin Pest Control, Randall Rollins seems like a guy who takes numbers seriously. But based on his actions in a divorce case here in Shelby County, Alabama, Mr. Rollins must think the rest of us are a bunch of dunderheads when it comes to numbers.
How else to explain what transpired in Rollins v. Rollins, which I have described as the worst courtroom cheat job I've encountered in the civil arena? Here are the numbers, and you can decide if something is fishy:
Birmingham resident Sherry Carroll Rollins told Legal Schnauzer she saw documents showing that a real-estate development company called St. James Capital LLC was started with $34 million--$17 million from Randall Rollins and $17 million from John W. Rollins Sr. John Rollins' portion was on behalf of Ted Rollins, his son and Sherry Rollins' husband at the time, with Ted designated as company president. According to Ms. Rollins, the documents showed that when John Rollins died in 2000, his shares went back into the company, and Ted Rollins became half owner.
When Ted and Sherry Rollins were getting divorced, and the case unlawfully was moved from South Carolina to Alabama, Ms. Rollins' lawyers deposed Randall Rollins about St. James Capital. (See Notice of Deposition at the end of this post.)
During the proceedings, Randall Rollins turned over a copy of a document called a Membership Interest Purchase Agreement. It states that Ted Rollins had sold his interest in St. James Capital for roughly $85,000, the total of loans he had received from Randall Rollins. (See document at the end of this post.)
Was this document legitimate? Does it make any sense in light of the following statement that Sherry Rollins made to Legal Schnauzer via e-mail:
I saw the paperwork in Ted's computer, where John Rollins put $17 million in for Ted, and Randall put in $17 million, for a total of $34 million to start the company in 1999. Ted was a Class B shareholder at that time and the two elderly Rollinses were Class A. Ted's dad died in 2000, and his shares in the will went back into the company, making Ted half owner of the company. Ted was not just the president; he owned half of the company. The company, in 2001 when I filed for divorce, owned 28 properties all over the U.S. and Canada, which had been or were being developed.
Let's digest that for a moment: You have a $17 million ownership stake in a company, which owns 28 properties around North America, and you are in business with your billionaire cousin who seems to know a thing or two about making a buck. You are going to sign away your rights to all of that for $85,000?
And that's not all.
During the divorce proceedings, Sherry Rollins hired an expert witness named David Wooldridge, who tried to determine the value of Ted Rollins' stake in St. James Capital. Mr. Wooldridge is not exactly a small timer; he is a shareholder in the Birmingham law firm of Sirote and Permutt, specializing in tax litigation, family succession, and business planning.
What did Wooldridge discover? Well, it appears Randall and Ted Rollins were not terribly forthcoming with information, and Shelby County Circuit Judge D. Al Crowson did not make them cough up much. But here is Sherry Rollins' statement about Mr. Wooldridge's testimony at trial:
When David Wooldridge testified at the divorce proceedings for an entire day, after examining anything he could lay his hands on regarding St. James Capital, he testified that Ted had the month before earned $1.4 million from one piece of property St. James owned.
Let's put ourselves in Ted Rollins' shoes: We've got an ownership stake in a company that had netted us, just the month before, $1.4 million--and that's on only one of 28 properties the company owns. We are going to sell our share of the company for $85,000?
I come from a long line of financial incompetents; I have relatives all over northwest Arkansas, and to my knowledge, not one of them thought to buy stock in a little outfit called Wal-Mart, when it started in that region a few decades back. I'm perfectly capable of "turning a million in real estate into $25 in cash," but not even I would be stupid enough to make the deal that Randall and Ted Rollins claim they struck.
After reporting on Ted Rollins' machinations for roughly two years, I'm not surprised by much of anything he might try to pull. Who can forget the famous child-support document where he claimed to make $50,000 a year--even though a court already had found he owned multiple private jet craft, was the president of St. James Capital, and belonged to one of the nation's wealthiest families.
But Randall Rollins? This guy breathes the same rarefied air of folks like Warren Buffet and Ted Turner. He's surrounded by names like that on various rankings of business tycoons.
Randall Rollins wouldn't blow smoke up our fannies, would he? He wouldn't commit perjury, would he?
Here are a couple of documents related to St. James Capital from discovery in Rollins v. Rollins. We have more to come.
R. Rollins Depo
R. Rollins Sell Out