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CEO Makes Company Disappear In the Midst of Divorce Proceedings

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Cross Posted at Legal Schnauzer

How can a multi-million dollar company vanish without a legal trace? Apparently it can happen when a CEO wants to ensure that the closely held business is not included among the marital assets in his divorce case.

That is one of many bizarre lessons to be taken from Rollins v. Rollins, the traveling divorce show that started in Greenville, South Carolina, and wound up in Shelby County, Alabama--contrary to common sense and all applicable law.

It appears that Ted Rollins, now the CEO of Charlotte-based Campus Crest Communities, did not want a closely held family business to get divided up in his divorce. So he took steps to ensure that his wife, Sherry Carroll Rollins, would flee with their two daughters to Alabama, where she had family. And that's when the company in question disappeared, meaning Ms. Rollins received nothing from a marital asset in which she had a clear legal stake.

We have focused on the jurisdictional change of scenery in Rollins, a shift that simply could not happen under Alabama law, as expressed best in a case styled Wesson v. Wesson, 628 So. 2d 953 (Ala. Civ. App., 1993). That's why Rollins stands as the worst case of courtroom abuse I've seen in the civil arena.

But oddities in the case hardly are limited to matters of jurisdiction. The virtual disappearance of a company called St. James Capital, LLC might be the strangest event of all. In fact, court documents indicate that a desire to keep St. James Capital under wraps might have been the reason the case shifted to Alabama in the first place.

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I didn't think anything could top the cheat job Mrs. Schnauzer and I experienced at the Shelby Courthouse in Columbiana, Alabama, in a case that started thanks to our difficult neighbor with a criminal record. But I would have to say that Sherry Carroll Rollins can top our tale of legal woe. And who could have dreamed that she would wind up in the same courthouse where we got shafted?

You might say that St. James Capital (SJC) was the forerunner of Campus Crest Communities. Information about SJC is sketchy, but Ted Rollins reportedly started the company with his cousin, R. Randall Rollins of Atlanta. SJC was a real-estate development company, and as seems to be the case with most Rollins businesses, it apparently involved significant dollars.

Ted Rollins hardly is a financial lightweight. But his cousin, Randall Rollins, is among the heaviest of heavyweights. Randall Rollins is the chairman of Rollins, Inc., the company that operates Orkin Pest Control and a number of other profitable ventures. Randall's younger brother, Gary W. Rollins, is president and CEO of Rollins, Inc.

How profitable are the Rollins enterprises? In 2004, The Atlanta Business Chronicle compiled a list of the city's "Stock Market Superstars." At No. 5 on the list was Gary Rollins, with a stock worth of $584.9 million. Right behind him, at No. 6, was Randall Rollins, worth a cool $546.4 (By the way, the No. 4 spot, just ahead of the Rollins brothers, was occupied by a fellow named Ted Turner--worth $843.3 million.)

The same publication compiled a "Barons of Business" for Atlanta in 2005. Gary Rollins was ranked No. 3 on that list, and his stock wealth had soared to $791 million. Randall Rollins was No. 4, with stock wealth of $763.8 million. The Rollins brothers clearly are among the "1 percent" who have done quite well in the Age of Bush. And they are Ted Rollins' cousins'.

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Given Randall Rollins' track record, it's safe to say that a company he formed with Ted Rollins would be pretty successful. So how could that company, St. James Capital, disappear in the middle of Ted Rollins' divorce case?

We still are looking for answers to that question. But court documents make it clear that St. James Capital did indeed vanish while Rollins v. Rollins  was litigated over about a seven-year period.

Sherry Rollins started the case in 2001 by filing for divorce in Greenville, South Carolina, where she and Ted Rollins lived with their daughters. What happened next? Here is how we described it in a previous post:

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I live in Birmingham, Alabama, and work in higher education. I became interested in justice-related issues after experiencing gross judicial corruption in Alabama state courts. This corruption has a strong political component. The corrupt judges are (more...)

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and those who have experience with it.... by Mark Adams JD/MBA on Thursday, Nov 10, 2011 at 6:59:21 AM would be easy to bribed a judge. What does a... by Ginger McClemons on Thursday, Nov 10, 2011 at 4:09:15 PM