|Mike Hartnett and Ted Rollins, when
Campus Crest was founded in 2004
Mike Hartnett, chief investment officer and co-chairman of the board, is beginning a gradual process to step away from the company, Yahoo! Finance reports. Hartnett and Rollins co-founded Campus Crest in 2004, and it has developed some 40 student-housing complexes near public universities around the country.
The news has special significance at Legal Schnauzer for two reasons: (1) Campus Crest has properties near four universities in our state (South Alabama, Troy, Jacksonville State, and Auburn), with plans to build one in Tuscaloosa at the University of Alabama; (2) Ted Rollins played a central role in Rollins v. Rollins, a divorce case unlawfully decided in Shelby County and described here as the worst courtroom cheat job we've encountered in the civil arena.
Here is how Yahoo! Finance describes Hartnett's plans:
On August 5, 2013, Campus Crest Communities, Inc. (the "Company") and Michael S. Hartnett, Chief Investment Officer and Co-Chairman of the Board of Directors, entered into an Amended and Restated Employment Agreement (the "Amended and Restated Employment Agreement"). Pursuant to the Amended and Restated Employment Agreement, Mr. Hartnett will relinquish the title and role of Chief Investment Officer and Co-Chairman of the Board of Directors on October 19, 2013. Effective October 19, 2013, Mr. Hartnett will commence a three year term of employment during which he will serve as the Company's Vice-Chairman, Special Projects. Mr. Hartnett will remain on the Board of Directors through the expiration of his current term and will not stand for re-election to the Board of Directors at the 2014 annual meeting of the Company's stockholders.
What does Mike Hartnett's exit mean? The answer to that question remains unclear, but our Campus Crest-connected sources in Alabama were shocked by the news. One of those sources is Birmingham resident Sherry Carroll Rollins, who was married to Ted Rollins when the company started. She says Hartnett was more or less the conscience of the company, and his departure almost certainly is a sign of conflict and upheaval.
Campus Crest seems to have a solid bottom line, and it recently announced plans to dip a toe in international waters, with plans for a student-housing complex in Montreal. But the company continues to be plagued with complaints about shoddy construction, faulty utilities, and other operational problems. (Here is an example from the student newspaper at the University of Northern Colorado.)
Rollins recently entered the market in State College, Pennsylvania, home to the Jerry Sandusky child sexual abuse scandal at Penn State. That was a curious choice, given Rollins own documented ties to the physical abuse of his stepson, plus an investigation for child sexual abuse of the same stepson, based on a complaint from an anonymous citizen in North Carolina.
The choice becomes even more odd, based on recent press reports in Central Pennsylvania that some 21,000 individuals associated with Penn State have been subjected to background checks in the wake of the Sandusky scandal--and that process is ongoing. Will Ted Rollins be the target of a background check, and if so, will he pass it? Not if it's done by someone with even a sliver of competence.
Is Mike Hartnett distancing himself from some of the problems bubbling beneath the surface at Campus Crest Communities. Sherry Rollins, in an e-mail to us, says the answer probably is yes:
If Mike Hartnett is getting out, it is because, as I have often suspected, he has a conscience. He has one daughter (graduated SMU) and a nice wife, Terry. I would imagine he would rather stay home and spend his fortune slowly and carefully than continue with the tomfoolery of Ted Rollins. And I suspect he might be concerned about his reputation. . . . Mike was reared by caring , nice parents in Maine. He is not from the same background as Ted--and it's good that he isn't. Something must have really [conflicted with] his morals.