July 8, 2009
Neal Wagner -
A lengthy legal matter between Columbus businessman Donald DePriest and his former associate Oliver Phillips has ended, with Lowndes County Chancery Court Judge Kenneth Burns ruling in favor of Phillips to the tune of $9.1 million.
Burns last week handed down a final ruling in the case, ordering DePriest to pay the sum to his former associate, after Phillips sued DePriest in connection with several business transactions over the past few decades. The trial was held May 4-8 at the Lowndes County Courthouse.
"I think the order speaks for itself, and we agree with the court''s findings," said Jay Nichols, an attorney with Columbus-based Nichols, Crowell, Gillis, Cooper and Amos law firm, who represented Phillips.
"There is still time for Mr. DePriest to appeal the decision, so I don''t really have anything specific to say about the ruling at this time," Nichols added.
According to state law, DePriest, if he chooses to appeal the ruling, must file a notice of appeal with the Mississippi Appellate Court within 30 days of Burns'' judgment.
As of this morning, calls and e-mails made by The Dispatch to DePriest, Phillips and DePriest''s attorney Ernest Taylor, of the Jackson office of Balch and Bingham, had not been returned.
A well-known donor to Republican political candidates, DePriest served on the board of directors of the Tennessee Valley Authority, appointed by President Bush, before resigning in April before his term ended.
Details of the ruling
According to court documents, DePriest; Chuck Cooper, a former WCBI-TV station manager; and Phillips, co-owner of the Plantation Pointe Retirement Community and a former senior partner with T.E. Lott & Co. who served as DePriest''s accountant for nearly 30 years; partnered in 1984 to form the cellular technology company Charisma Communications.
After founding Charisma, the three signed an agreement stating DePriest would have a 65 percent interest in the company, Cooper would have a 25 percent interest in the company and Phillips would have a 10 percent interest.
However, Cooper sold his interest in the company to DePriest for $500,000 and left the partnership.
When Charisma was purchased in 1986 by McCaw Communications for about $85 million, DePriest received about $26 million and later paid $1 million to Phillips.
"Phillips says that the $1 million was a partial payment he was entitled to receive under the 10 percent ownership interest of the 1984 joint venture agreement," read the Chancery Court judgment. "Phillips testified that the balance owed him would be paid from his and DePriest''s next business venture."
DePriest in 1990 assigned Phillips 70 MCT Investors stock units in what Phillips explained was "made to him to show what was owed him from the proceeds of the Charisma sale," Phillips said in court documents. DePriest founded the MCT Investors company in 1987.
When McCaw purchased Charisma, McCaw officials agreed Charisma stockholders would receive a percentage of the profits if McCaw ever sold its Charisma assets.
When McCaw later sold the assets, it did not "honor the side agreement with Charisma that it was to share profits with the former shareholders of Charisma," read court documents. DePriest and others sued McCaw and won $90 million in 1996.
When Phillips requested his 10 percent share of the lawsuit funds, DePriest replied the 70 MCT Investors shares he previously gave to Phillips "fulfilled the only obligation he had to Phillips," said the court judgment.
Phillips in 1996 agreed to settle with DePriest for $10 million, and retrieved a $5 million check and a $5 million promissory note from DePriest.
In his judgment, Burns agreed DePriest still owed Phillips the $5 million from the 1996 promissory note, and ordered DePriest to pay the sum to Phillips.
Burns also awarded Phillips $979,444 to cover the cost of 467 MCT of Russia stock shares DePriest gave to Phillips in 1998. DePriest in the 1980s also founded MCT of Russia.
DePriest gave Phillips the stock shares in the form of an option to be exercised before 2006. However, when Phillips attempted to exercise the option in August 2006, he discovered the "MCT of Russia units had been converted to MCT Corporation stock in 2000 and the Russian units had no value outside its value of converted stock," said court documents.
In his judgment, Burns also awarded almost $3.2 million to Phillips to compensate for unpaid loans Phillips gave to DePriest between 2001 and 2004.