For Jerry Jones, owner of the Dallas Cowboys, what could be worse than the team's 5-11 record in 2002? How about his own investment record?
Jones filed $16 million in claims last week against the estate of M. David Howell Jr., the Arkansas banker and investor who committed suicide last October as the scheme was unraveling. Attorneys for Jones, who is a graduate of the University of Arkansas, filed the claims in Pulaski County Probate Court.
They are the biggest to date in the case, in which investors in Memphis, Arkansas, and Texas lost some $70 million and counting in unregistered promissory notes with "returns" as high as 40 percent.
Until last week, the largest claims against Howell's estate had been filed by Memphians Frank G. Barton Jr. ($5 million) and Logan Young ($4.5 million). At least 15 Memphis-area residents have sued Howell's estate and brokerage firms Refco, Goldman Sachs, and Merrill Lynch in Crittenden County Circuit Court. Howell allegedly told them he had devised a system for investing in commodities and securities that was earning returns of up to 90 percent at a time when the stock market bubble was bursting. In fact, the lawsuit says, most of the "returns" came from other investors' money.
As the Flyer has previously reported, Howell committed suicide in October in a hotel room in Beverly Hills, California. A few days earlier, the Arkansas Securities Department ordered him to stop selling the unregistered promissory notes and Bank of America sued him over $1.9 million in bad checks written in September and October.
Jones made two investments with Howell last year -- one for $5 million in April and another for $11 million in August. His claim includes a photocopy of a check for $6.125 million signed by Howell and dated January 15th, 2003. Howell apparently post-dated checks for investments plus interest and gave them to investors as a form of security.
Another claim was filed last week by Hot Springs banker Richard T. Smith for $7.5 million. Smith, expected to be a key figure in future litigation, co-signed some of the promissory notes with Howell and helped bring in new investors. In Memphis, investors say the sales network included friends of Young, who is from Osceola, Arkansas, and members of Chickasaw Country Club.
Several smaller claims were also filed last week in Pulaski County Probate Court. The deadline for filing claims is February 14th. A source familiar with the case said there will probably be an attempt by Howell's side to move everything to Little Rock, which the Memphis group is expected to oppose.
You know a piece of property is doomed when people start talking about turning it into a prison. That's one of developer Jackie Welch's ideas for the Mall of Memphis.
Welch has no financial interest in the property, and his suggestion came in the midst of some wide-ranging musings about the general state of Memphis and Shelby County. But the owner of Welch Realty does know a little about real estate and Memphis demographics, having sold businesses and building sites along Highway 51 in Whitehaven, Winchester in Hickory Hill, and Germantown Road in Cordova as the fortunes of those areas rose and/or fell.
The sprawling Mall of Memphis on the south leg of Interstate 240 has lost its anchors and scores of other tenants as retailers and customers moved east, first to Hickory Ridge Mall and then to Wolfchase Galleria. The Raleigh Springs Mall appears headed for a similar fate. Last week, Dillard's announced that it will join Goldsmith's and J C Penney in leaving the 32-year-old mall.
Customers and retailers have moved south and east to DeSoto County and the Wolfchase Galleria. Attempting to recapture some of that via annexation, Memphis has stretched its boundaries out Highway 64 nearly to Fayette County. Our disposable city encompasses more than 300 square miles.
For now, the most seriously sick patient is the Mall of Memphis, whose vast empty parking lots along Nonconnah Creek are in plain view of thousands of motorists passing through Memphis every day.
"They ought to turn those old department stores into schools and save some money," Welch said, noting the general sense of alarm about county debt tied to new school construction. "Or they could put in a minimum-security prison."
No cracks, please, about them being one and the same.
These suggestions are likely to get about as far as Welch's earlier proposal to sell off a strip of Shelby Farms along Germantown Road or former Shelby County mayor Jim Rout's joking observation that Midtown's old Sears Building would make a swell prison. But the two malls on life support may well join the Sears Building on the perennially vacant list if somebody doesn't come up with a better idea than the Community Redevelopment Act subsidies that were proposed and then aborted by the city a few years ago.
Welch, who sold nine school sites serving his subdivisions to the county board of education, said he's out of the school business and focusing on a new bank he has started called First Souce which will open in April in Germantown.
"We're not going to be the leaders in the residential market for the next few years like we were for the last 10 years," he said.