Cauley again pleads for more time.WHY WOULD GENE CAULEY, WITH A net worth once pegged at $100 million by those familiar with his financial affairs, need so many months to raise a mere $9.3 million? The record suggests that the former class-action lawyer with a national reputation still has liquidity issues that are making it difficult for him to come up with the restitution owed to clients in a securities case. Ongoing cash-flow problems are further complicated by financial claims against him and by his highly leveraged spending habits. Lawyers who won a multimillion-dollar judgment against Cauley and his billboard companies in the electrocution electrocution Method of execution in which the condemned person is subjected to a heavy charge of electric current. The prisoner is shackled into a wired chair, and electrodes are fastened to the head and one leg so that the current will flow through the body. of a young employee have moved aggressively to protect their clients' interest, and at least two banks have filed collection suits for loans made when Cauley was considered to be very rich indeed. Along the way, Wachovia Financial Inc. of Charlotte, N.C., repossessed his private jet, a Gulfstream G450 with an estimated value of $27 million. Cauley, who surrendered his law license in May, was scheduled to be sentenced this Wednesday in federal court in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of for his confessed misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any of client funds. But last week his lawyer, John Wesley Hall of Little Rock, requested a second continuance, saying Cauley needed still more time to come up with the restitution "because, after sentencing, it will be much harder and most certainly disserve dis·serve tr.v. dis·served, dis·serv·ing, dis·serves To treat badly; harm. the victims." Unspoken in the motion is the presumption that Cauley's sentence will include significant time in a federal prison; the sentencing guideline in his case ranges from about six to about eight years, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a source familiar with the federal criminal system. If the motion is granted as expected, the new sentencing date likely would be after Thanksgiving. To This Point Cauley pleaded guilty June I to wire fraud and criminal contempt Noun 1. criminal contempt - an act of disrespect that impedes the administration of justice contempt of court - disrespect for the rules of a court of law for stealing from what was originally a $65.8 million settlement in a class-action securities case against the Bisys Group. [ILLUSTRATION OMITTED] Cauley, sole signatory sig·na·to·ry adj. Bound by signed agreement: the signatory parties to a contract. n. pl. sig·na·to·ries One that has signed a treaty or other document. on the settlement account, couldn't come up with the last $9.3 million owed to clients when the federal judge in New York ordered the final distribution of funds. Cauley told The Wall Street Journal that shoring up Noun 1. shoring up - the act of propping up with shores propping up, shoring supporting, support - the act of bearing the weight of or strengthening; "he leaned against the wall for support" cash-flow problems was the motive behind his theft. (Last fall, Arkansas Business agreed to Cauley's demand that its reporters no longer attempt to contact him for comment on any articles.) He was charged with taking $9.3 million, although there is widespread suspicion that he helped himself to much more of the settlement money. For one thing, disclosures filed with the Securities & Exchange Commission show that he sold more than $10 million worth of stock in Home BancShares Inc. of Conway between Oct. 29 and Nov. 21, 2008--just days before the distribution of the settlement was ordered. (Cauley subsequently resigned from the HBI HBI Home Builders Institute HBI Hot Briquetted Iron (plant or facility) HBI Health and Biomedical Information HBI Hot Beef Injection (band) HBI Healthcare Building Ideas (magazine) board of directors, which he joined early last year after the bank holding company bought Centennial Bank of Little Rock, in which Cauley was a major investor.) Cauley had more than the $9.3 million in cash and easily liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. securities earlier this year, according to sources familiar with his finances. Prosecutors said Cauley wired a total of $36.7 million to the Bisys case administrator between Dec. 19 and Feb. 19. The $9.3 million shortage was discovered by the court when Cauley failed to pay the last installment in April. Prosecution commenced almost immediately. He was quickly able to pay another $500,000, but the remainder has been slow in coming. Federal prosecutors agreed to a four-week delay from the original sentencing date of Sept. 10 to give Cauley more time to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the assets and make good on promised restitution. But that extra time yielded no extra money, according to attorney Hall. Hall said Cauley had indicated that deals to come up with the remaining $8.8 million had been complicated by other courtroom problems. "They report to me they're pretty close, but there are so many legal entanglements," Hall said. Entanglements Lawyers have tied up the assets of more than 120 limited liability companies associated with Cauley in an effort to collect on a $3.7 million verdict against him and his billboard ventures. Also in the knot are lenders filing suit to recover money on delinquent loans to Cauley or his enterprises. The new motion to delay sentencing that Hall filed last week alludes to "substantial funds that are designated for restitution" that are "subject to a bank lien which defendant is attempting to resolve." This is a cryptic reference to accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and to future settlements from lingering litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. work used to secure Centennial Bank loans totaling more than $13 million, according to sources familiar with the details. Cauley's ability to make the Bisys plaintiffs whole hinges on whether these assets can be freed up or the debt restructured. "We hope Gene can pay back the money, so our clients won't suffer," said one attorney involved with the Bisys Group settlement. Further complicating his financial meltdown meltdown Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb are lawsuits filed by banks seeking to collect on delinquent loans, both large and small. * First Tennessee This article or section has multiple issues: * Its neutrality is disputed. * It reads like an advertisement and needs to be rewritten in a neutral point of view. * It may require general cleanup to meet Wikipedia's quality standards. Bank of Memphis is trying to recoup $3.39 million outstanding on a loan to Cauley's Coco Holdings I LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , delinquent since March 31. A court-appointed trustee is now overseeing the operation of Coco and its related billboard entities. The bank alleged that assets used to secure the loan were transferred without its consent. Cauley personally guaranteed the debt. * Capital Bank of Little Rock filed a foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. suit against Cauley on Aug. 27. First mortgage debt of $76,817 was secured by a 1,400-SF home in west Little Rock's Sandpiper sandpiper, common name for some members of the large family Scolopacidae, small shore birds, including the snipe and the curlew. Sandpipers are wading birds with relatively long legs and long, slender bills for probing in the sand or mud for their prey—all Creek neighborhood. According to court filings, Cauley paid off the mortgage in September. Although the debt was in Cauley's name, he had transferred ownership of the property to his mother, Carolyn Cauley. The transaction was dated Dec. 15, 2008, but wasn't filed of public record until March 26, 2009. A second bad-debt claim by Capital Bank, on a $192,829 balance owed on a line of credit to Gene Cauley, remains active. Plaintiff v. Defendant Cauley is also on the hook Adj. 1. on the hook - caught in a difficult or dangerous situation; "there I was back on the hook" dangerous, unsafe - involving or causing danger or risk; liable to hurt or harm; "a dangerous criminal"; "a dangerous bridge"; "unemployment reached dangerous for a personal judgment of $545,000 in connection with the July 2005 death of a 22-year-old employee of his billboard ventures. The family of Matt Johnson also landed a judgment of nearly $3.1 million against 10 billboard entities led by Cauley. That May 21 judgment also made Billboard Acquisitions I LLC and Billboard Acquisitions VIII LLC liable for nearly $218,000 in legal fees and costs incurred by First Electric Cooperative Corp., which was absolved of any blame for Johnson's death. Allen Bird II, a Little Rock lawyer helping track down Cauley assets to collect on the judgment, has staked a claim on 32,147 shares of Home BancShares stock. The shares, recently valued at more than $700,000, have been held in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. as part of an earn-out provision since Centennial Bank was acquired by HBI. "We believe the bank stock will more than cover the individual judgment, and the stock is not due to come out of escrow until January," Bird said. "We'll just bolster our position and make sure we have a good position at the table when all this starts to unfold." The First Tennessee litigation has added another layer of complexity to the collection efforts as Cauley's money troubles mount. "This thing is a mess now," said Will Bond, a Little Rock lawyer representing the Johnson family. Hovering above the fray is a lawsuit filed against Cauley by Seiz Sign Co. of Hot Springs. The company claims Cauley breached a 2006 agreement to buy the firm for $8.75 million. The lawsuit is seeking $5 million in damages after Cauley allegedly tried to change the deal to buy the billboard side of the business for only $4.5 million. "We're just kind of standing by waiting and watching before we spend any more time or money on it," said Bud Cummins Harry Earnest "Bud" Cummins III, was born in Enid, Oklahoma. He is a former United States Attorney of five years in the Eastern District of Arkansas. After moving to Little Rock, and working in the construction business, Cummins obtained a law degree from the William H. , attorney for Seiz. "Time will provide some indicators if Mr. Cauley would be able to meet any additional liabilities or not. If it turns out that Mr. Cauley is insolvent, there's no point in going forward." Back in June, Cauley got permission from prosecutors to travel to Dallas to consult with a bankruptcy attorney. Last week, according to a letter to the court from his lawyer, he was back in Dallas again. His mission wasn't specified this time. But the letter did say that he was staying at the Four Seasons Resort & Club--where, according to its Web site, room rates start at $355 per night. By George Waldon george@abpg.com RELATED ARTICLE: The property securing Cauley's Freedom. GENE CAULEY CHOSE ABOUT 460 undeveloped acres in west Pulaski County Pulaski County is the name of several counties in the United States:
The block of land, about a mile north of Lake Maumelle, is divided into four tracts used to secure debt totaling about $6.8 million. If Cauley has $3 million of equity in the property, that means the land is worth at least $21,300 per acre. The land was assembled in four transactions with Cauley's SEC WLR WLR Water and Land Resources (King County, WA) WLR Wholesale Line Rental WLR Weekly Law Reports (UK) WLR Wafer Level Reliability WLR Weapons Locating Radar WLR Buoy Tender, River Holdings II LLC buying the property from 2610 Acres LLC, a company associated with Cauley and upscale homebuilder Rick Ferguson of Little Rock. A 150.38-acre tract is secured by a $2.3 million mortgage held by Twin City Bank of North Little Rock. The land was purchased for a reported $3 million in July 2007. A 108.76-acre tract is secured by a $1.37 million mortgage held by Allied Bank of Mulberry mulberry, common name for the Moraceae, a family of deciduous or evergreen trees and shrubs, often climbing, mostly of pantropical distribution, and characterized by milky sap. Several genera bear edible fruit, e.g. . The land was acquired for a reported $1.4 million in July 2007. A 100.86-acre tract is secured by a $1.57 million mortgage held by Metropolitan National Bank of Little Rock. The land was bought for a reported $3.5 million in September 2005. A 100-acre tract is secured by a $1.59 million mortgage held by Metropolitan. The land was purchased for a reported $2.5 million in January 2006. [ILLUSTRATION OMITTED] The two Metropolitan loans now are cross-collateralized with each other as well as three other loans from the bank that totaled $4.8 million, $1.46 million and $132,600. |
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