The Best & Worst of 2011

Best Makeover
Since we're both judge and jury, we're going to give the prize to the redesign of Arkansas Business, which launched with the Aug. 1 issue.

Worst (as in Longest) Correction
That would be on Arkansas Business' list of largest accounting firms in Arkansas.
After we published the list on Sept. 19, Jimmy Corley, executive director of the Arkansas State Board of Public Accountancy, telephoned to say that he'd searched his records and could find no Arkansas-licensed CPAs who listed Honkamp Krueger & Co. PC, based in Dubuque, Iowa, as their employer, though the firm itself was registered.

That was most unfortunate because AB had ranked Honkamp at No. 3 with 36 CPAs in its Bentonville office.

Ryan Hauber, a partner with Honkamp whom AB had earlier interviewed about his firm's entry into Arkansas, provided no reassurance but some clarity. He acknowledged the 36 CPAs referred to the entire firm, that it had 30 CPAs who do work for companies based in Arkansas and that all 30 were licensed in other states.

He somehow had misunderstood the cover letter accompanying the Arkansas Business survey saying the list is "ranked by number of certified public accountants on staff in Arkansas."

"On staff - I guess there's ambiguity to that," Hauber said. "Maybe there was a misunderstanding," he eventually acknowledged.

Worst Time to Share a Name
The felonious problems of a bogus special improvement district bond magnate had bothersome consequences for Kevin Lewis.

The Benton process server and bail bondsman was splashed by some unwarranted notoriety because he shared a name with the former lawyer, sentenced to 10 years in federal prison for his 13-year scheme.

He is Kevin Lewis, but not that Kevin Lewis.

And while readers of Arkansas Business are not likely to confuse bail bonds with improvement district bonds, some of the other Kevin Lewis' clients only know one kind of bond.

Best Game of Hide-and-Seek
It took Andy Myers 50 days to find and serve bond fraudster Kevin Lewis with lawsuits filed by creditors. Myers found his man in Searcy at his parents' house on Feb. 3. "I shouted, ‘Kevin Lewis is served' and set the papers down in the driveway," Myers recalled.

Best News for Doughnut Lovers
That came in July, when Dunkin' Donuts of Canton, Mass., announced that it had signed agreements with two franchisees to develop 11 new restaurants throughout Arkansas during the next several years. The first restaurant is scheduled to open in 2012 in Fort Smith.

Best Case of Gold Fever
Joe Blankenship discovered it is easier to spend money than make it, and that leveraging assets in losing investments speeds up the process of blowing through money. The former Little Rock businessman turned to a time-honored vehicle to restore his flagging fortunes: gold mining.

Blankenship mined hundreds of thousands of dollars from individuals who loaned him money to recover a cache from Yamashita's gold, a legendary treasure trove of World War II booty allegedly amassed by the Japanese during their Asian conquests.
Instead of getting a hefty payday from Blankenship for helping him, the lenders/investors got empty-handed excuses.

Worst 8-Ks
When something "material" happens to a publicly traded company, it is required to file a form called an 8-K with the Securities & Exchange Commission. On the first business day of 2011, Home BancShares Inc. of Conway filed a particularly painful 8-K announcing additional loss reserves of close to $60 million, including $23 million in debts clearly associated with convicted former lawyer Gene Cauley and almost $6 million confirmed to be associated with the unfolding bond fraud scam operated by Kevin Lewis. The next day, Bank of the Ozarks Inc. of Little Rock filed an unusual - some might say opportunistic - 8-K announcing its upcoming earnings release and, oh by the way, pointing out that it had no exposure to fraudulent rural improvement district bonds that were plaguing several other Arkansas banks. The next week, Simmons First National Corp. of Pine Bluff filed an 8-K saying it had made one loan secured by the phony bonds but its exposure was less than $350,000.

Best Long-Running Lawsuit
An Arkansas civil fraud case that turned into a criminal case in federal court in Mississippi celebrated its 10th anniversary in April 2011. The case against Arkansas agri wheeler-dealer Jimmy Winemiller et al still hasn't gone to trial over the sale of the ironically named Straight Creek catfish farm. The criminal component of the long-running, meandering litigation is scheduled to go to trial on Feb. 27, marking the 16th time a courtroom date has been set in the five years since the indictment.

Worst Case of Father Knows Best
Lying and cheating investors as a shortcut to living large isn't your normal family tradition. But then the Rand family, formerly of North Little Rock, isn't your average family. Tony Rand passed along a legacy of fraud to his five sons: Wayne, Jeff, Greg, Mark and Bill. The elder Rand was sentenced to seven years in prison in 1991 for churning $17 million through his would-be 400-screen movie theater chain. Twenty years later, he and his boys were busted for scamming oil and gas investors out of more than $110 million.

Worst Judicial Tongue-Lashing
U.S. District Judge Billy Roy Wilson is routinely described as "colorful," and his red-facedness fairly leaps out of his transcribed words to Rose Law Firm attorney Ryan Solomon, whose client, USA Drug scion Jason LaFrance, had exhausted every attempt to avoid sitting for a deposition in November.

Even the presence of LaFrance's 1-year-old son in the garage where the deposition was ultimately held didn't dissuade Wilson. "Well, I'll tell you what you're required to do. You're required to have this damn deposition. And with a baby raising Cain like that by the court reporter is not the way to do it. Now, figure out some way to get it done. Am I going to have to send a marshal out there to conduct this deposition?" the judge said in the last of four cellphone conferences in a matter of hours.

When Solomon tried again to postpone the deposition for lack of a babysitter, Wilson had another suggestion: "Where is your partner? Why can't he come out and let you go and hold the baby in another room? This is - this is an outrage. ... I've had enough of it. Now, you get your partner out there, or get a nurse or somebody, and conduct this deposition like an upright lawyer." Wilson later sanctioned Solomon.

Worst Labor Day Party
Precisely what happened at this night-before Labor Day party is unclear, but it appears to have involved illegal drugs and hot tub lounging in Maumelle.
We do know that the homeowner and host, Christopher Barbour, told police Sept. 5 that Brett Cummins, then a meteorologist for KARK-TV, Channel 4, and Cummins' friend Dexter Williams of Mountain Pine "began to drink and use illegal narcotics."
Cummins awoke in a drained tub on Labor Day morning, and next to him was Williams' naked corpse, Barbour said.

The Maumelle police released only a preliminary autopsy of Williams' body that revealed the 24-year-old died of asphyxiation.  

Best News for Rice Farmers
That would be the $750 million settlement agreement that U.S. rice farmers, including a number in Arkansas, and Bayer AG reached this summer over contamination of the U.S. rice supply by Bayer's genetically modified rice.

Best Time to Buy

For signs that the economy was improving, one has to look no farther than Arkansas Business' list of $1 million homes bought in Pulaski County in 2010.

That year 22 homes were bought, up from 14 in 2009. While most of the buyers received a deal, the sellers ended up on the losing end. Eight homes in 2010 sold for less than what was originally paid for them.

Worst Freezer Burn
After 79 years in business, Yarnell Ice Cream Co. of Searcy closed its doors on June 30, leaving about 200 out of work. It later filed for Chapter 7 bankruptcy protection and listed $15.7 million in debts and $8 million in assets.

Schulze & Burch Biscuit Co. of Chicago bought most of Yarnell's assets for $1.34 million at an auction and has indicated it will restart its freezer to make more Yarnell's ice cream.

Worst Place to Work
Several exotic dancers are suing their boss at Visions.

The reason? Their boss at the North Little Rock nightclub allegedly misclassified the dancers as independent contractors rather than employees so he wouldn't have to pay minimum wage.     

In addition, the dancers also had to pay $20 to $25 to the disc jockey and $50 or more to Visions in "house fees" as soon as they arrived at work. And sometimes the dancers didn't make enough in tips to cover the fees.

They are seeking a class-action certification for their lawsuit where they alleged violations of the Fair Labor Standards Act.

Visions, in its court filing, denied the allegations of wrongdoing.

Worst Time to Receive a Tax Bill
At the end of October 2010, Ralph Bradbury, the former president of Continental Express Inc. of Little Rock, and Pete Campbell, the trucking company's former executive vice president, received a bill from the Internal Revenue Service for more than $2.8 million for unpaid employment taxes. Campbell had died on Oct. 28, 2010, though, so his widow received the bill on the day of her husband's funeral.
Bradbury disputed the bill and filed a lawsuit in U.S. District Court to get it removed.

Worst Business Model
A number of Internet business cafes started opening in Arkansas in 2011. While checking email or firing off a fax, customers could also play casino-type video games for a chance to win cash prizes. Those in the industry insisted what they were offering was not gambling, but rather a type of sweepstakes promotion.

Government officials saw it differently and shut some of them down. A court has been asked to settle the legal question.

Worst Due Diligence
One of the worst cases of due diligence can be found by JDA Software Group Inc. of Scottsdale, Ariz.

It bought i2 Technologies Inc. in January 2010 knowing that i2 was being sued by Dillard's Inc. of Little Rock.

But JDA wasn't too concerned.

The company's due diligence found "there was potential financial exposure to i2, but that it was immaterial and that the chances of i2's actions being interpreted as fraudulent were not material."

A Dallas County, Texas, jury found otherwise and awarded Dillard's an eye-popping $246 million in June 2010. JDA appealed and Dillard's agreed to settle the case for a mere $57 million.

Worst Vacation
It was on a vacation that Mary Hardin first suggested playing the slot machines to her husband. Twelve years later, Lu Hardin pleaded guilty to federal charges of wire fraud and money laundering for snookering the trustees of the University of Central Arkansas out of a $300,000 bonus to which he was not entitled - money he needed to pay gambling debts amassed strictly from playing slots.

Best Water-Cooler Topic
Sissy's Log Cabin of Little Rock and Pine Bluff presented in October and November a reality-show-inspired contest titled the "Perfect Girl for the Perfect Jewelry Contest." The promotion was open to single Arkansas women between the ages of 18 and 29.

Young women submitted their photographs and descriptions of themselves, and CEO Sissy Jones' grandson, William Jones, chose the winner from finalists of a public vote.
The contest winner won a dinner date with William Jones, a limousine ride with him and a $1,000 gift certificate to spend at - where else? - Sissy's Log Cabin.

Best Celeb Sightings

Actor Matthew McConaughey and Academy Award-winning actress Reese Witherspoon were spotted around southeast Arkansas, where "Mud," the largest movie production ever to be filmed in Arkansas, was being shot last fall. The two stars play leads in the movie.

Witherspoon was also seen in Little Rock.  

Little Rock native Jeff Nichols is the director of "Mud," which is scheduled for a 2012 theatrical release.

Worst Inconvenience
An international hacking group known as Anonymous electronically trespassed on the websites of 34 Arkansas sheriff's offices in late July.

The websites were among 77 law enforcement sites in 18 states that Anonymous targeted. Brooks-Jeffrey Marketing Inc. of Mountain Home hosts all 77 of the hacked sites.

Anonymous posted some sensitive information from the sheriff's office websites publicly online, but much of the leaked data was benign.

Improving the security and repairing the sheriff's office websites post-hacking took months.

"It's been very aggravating to us and an inconvenience," Newton County Sheriff Keith Slape said.

Worst Plan to Save a Business
Little Rock attorney S. Graham Catlett recently was reprimanded and fined $1,550 by the Arkansas Supreme Court Committee on Professional Conduct for his role in a 2005 scheme to pass off conventional tomatoes as organic produce.

Catlett was a business partner in a wholesale organic tomato production business. When the crop failed in 2005, he and others had the bright idea to buy regular tomatoes and pass them off as higher-priced organic ones.

But one of the business partners reported the mislabeling scheme to authorities. The business was stripped of its ability to label its tomatoes as organic in 2009. And Catlett was reprimanded this year.

Best News for Cat Bloggers
Righthaven LLC of Las Vegas, the company that was authorized to file copyright infringement lawsuits for Arkansas-owned Stephens Media of Las Vegas and Arkansas Democrat-Gazette owner Wehco Media, lost a string of lawsuits in 2011.

Righthaven become the demon of a cat blogger and other website owners who ended up being sued for what, in at least a few cases, appeared to be legal use of copyrighted material or simple ignorance of copyright law.

Federal judges in both Colorado and Las Vegas have ruled against Righthaven - giving Righthaven targets the possibility of recovering their legal fees or the amounts they paid to settle out of court. Assuming, of course, Righthaven has any money.

Worst Taste
The Arkansas Farm Bureau published a photo of an African-American inmate of the Arkansas Department of Correction standing in a cornfield, a hoe resting on his shoulder, on the cover of the July-August 2011 issue of the Farm Bureau publication Front Porch.

In the picture, a black prison guard on horseback watches inmate Deadrun Tolefree - looking together like an image out of Arkansas' unpretty pre-Civil War past. A cover blurb about "cool watermelon recipes" made it worse.