Former Alabama Gov. Forrest (Fob) James joined his wife Bobbie, his son Fob IV and his daughter-in-law Sara in filing suit against another son, Patrick F. James, after the defendant resigned as the president of a family-owned business amid allegations of breach of trust, fraud and deceit. The lawsuit was filed as the state’s current governor, Robert Bentley, is in the news for an uncontested divorce from his wife of 50 years.
In a complaint filed Sept. 25, the James plaintiffs accuse Patrick (PJ), in his capacity as president of Escambia County Environmental Corporation, a household garbage landfill in Greenville, of refinancing a $3.3 million loan and forwarding $150,000 in cash proceeds to another company “wholly or partially owned and/or controlled” by the defendant for his “indirect benefit.”
But the refinancing payment, which the complaint says was deliberately concealed from family member shareholders, was just the straw that broke the camel’s back, according to a harshly-worded personal letter attached as an exhibit to the lawsuit.
The letter, written by Fob IV but endorsed by both parents, was delivered to Patrick on Sept. 21. The parties explain their belief that the defendant has essentially “lived off” his parents’ wealth since he filed for Chapter 7 bankruptcy in 2009 or 2010, spending as much as $1.5 million for “imaginary” or deceitful “deals” to bolster the family business.
Fob IV further accuses his brother of “tricking” his parents into signing over the deed to a house in Daphne to Patrick and his wife Shannon in the event of their death, contrary to their will. Shannon was a grantor, along with her parents-in-law, on a $950,000 mortgage on the house last October, according to probate records.
Fob IV calls the mortgage “a threat to mom and dad’s livelihood” and in the letter, he asked his brother to set up a phone conference with a realtor to “get it sold ASAP.”
In a letter of his own the following day, Patrick submitted his resignation as president of ECEC acknowledging some of the impropriety but admitting no fault. He said the formation of his own company, American Diversified Investments LLC, “was a strategic move to ensure ECEC has no exposure to the related transactions and if successful gives me the ability to repay loans to Dad that do not create a negative tax impact for him.”
Patrick gave some insight into the “deals” he was pursuing, including one that “will produce $400,000 net cash flow if it closes” and another that will “increase ECEC net income for years to come.” He further explained that his parents were aware and supportive of all circumstances leading to the home mortgage, but promised to transfer the title back to them anyway.
Without any particular detail, he provided a list of six liabilities he intends to repay, noting his plan to sell his interest in “commercial plazas” and use “any cash left in the northwest policy.” Patrick also admitted his parents “offered tremendous financial assistance” in the wake of his bankruptcy and said he “desperately want(s) to repay obligation,” but he denied his brother’s accusations of deceit or manipulation.
“It is true I have borrowed money from Mom and Dad , it is true I have tried to re-establish my life, it is true that I am greatly sorrowful if I have caused any undue stress or burden on the two people I absolutely love more than life,” he wrote. “It is not true that I or Shannon have acted deceptively or maliciously towards Mom and Dad which the tone of your letter suggests.”
A handwritten note from the former governor accompanying Fob IV’s letter is optimistic of a resolution, imploring Patrick to “get everything (100 percent) cleared up and start over. We can overcome and will.” The matriarch and former first lady, on the other hand, seemed more disappointed.
“it is to my great sorrow to find out the missing money yesterday,” Bobbie James wrote. “I second the motion and plans in this letter.”
Another son of the former governor, Tim James, himself a gubernatorial candidate in 2002 and 2010, is listed as the agent for ECEC on state records but has “been totally removed” from any stake in the company, according to Patrick’s letter. Tim James is however, the attorney representing the plaintiffs in the suit. Fob James served two terms as governor, from 1979 to 1983 and from 1995 to 1999. The complaint is embedded below.
Edited On Oct. 1 2015 at 9:25 a.m. to clarify the role of Tim James.
This page is available to subscribers. Click here to sign in or get access. During the month of December, give (or get) a one year subscription with TWO months FREE.