Cauley Asks for More Time to Raise Restitution

by George Waldon  on Monday, Oct. 5, 2009 12:00 am  

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 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 securities earlier this year, according to sources familiar with his financial affairs.

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 assets and make good on promised restitution.

But that extra time yielded no extra money, according to defense 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 and to future settlements from lingering 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.

 

 

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