Co-Defendant PCIDC Shares Judgment Liability With Davis

The Pulaski County Industrial Development Corp. is on the hook for a judgment of more than $65,000 as a co-defendant in its president's quixotic copyright dispute with telecommunications giant SBC Communications Inc. of San Antonio.

PCIDC is a private, state-regulated entity that receives substantial tax exemptions for the purpose of raising capital for local businesses that might otherwise be unable to find funding.

PCIDC already has paid to dissolve various corporations that President Ron Davis had incorporated in Arkansas and other states. U.S. District Court Judge G. Thomas Eisele in December ordered the dissolution, finding that the companies — with names such as Southwestern Bell Corp., SBC Wireless and Southwestern Bell Communications Inc. — violated SBC's trademark rights.

Davis said last week that PCIDC money has been used because the industrial development corporation was the owner of the newly-incorporated SBC Wireless.

"We had purchased the name SBC from some folks who had had it since 1975," Davis said. "PCIDC had made the agreement to buy SBC about a year before [the federal court case]. When I was ordered to dissolve it, we had to pay the back taxes."

Eisele, in a memorandum opinion accompanying his order granting summary judgment against Davis and PCIDC, said Davis' actions "can only be described as bizarre."

SBC, in its motion for summary judgment, said Davis' actions were apparently motivated by a fear that Statco Wireless Inc., a PCIDC investment, would be damaged by an earlier lawsuit by an SBC division seeking to enforce a noncompete agreement.

"A short time after the filing ... Davis sprang into action," the motion read. "Mr. Davis was, and still is, very upset about the state court action ... It appears that Mr. Davis believed, and continues to believe, that by filing the Articles of Incorporation and fictitious name applications with the Arkansas Secretary of State, that he somehow had an entitlement to use of the Plaintiffs' trade names and marks in Arkansas.

"In addition, it appears that Mr. Davis believes ... that [SBC] could not file a legal proceeding in an Arkansas state court without first obtaining a 'certificate of authority' from the Arkansas Secretary of State."

As Arkansas Business reported in March 2001, Davis sent a letter to the CEO of SBC Communications Inc. that included the following demand:

"Sir, you are hereby ordered by the legal owners of the mark of 'Southwestern Bell,' the Southwestern Bell Corp., and Southwestern Bell Communications Inc. to immediately cease and desist from maintaining any further legal actions or proceedings either in and/or on the names of now, our companies, again as stated above, anywhere within the great state of Arkansas."

Davis then closed the letter with this paragraph, which he titled "Ultimatum":

"You have 72 hours to properly respond, as in, to dismiss or withdraw from the above referenced case. If you do not, we will consider your army of legal Goliaths to come, in fair warning, please tell them. In their right knowing, David's Army doth here await."

Davis said last week that, through PCIDC, he intends to make Statco a publicly traded company, and SBC's actions jeopardized that plan.

"[SBC] put us in very serious concern or jeopardy ... I'd done exactly what they had accused me of doing [in order to protect the Statco investment.] They wanted me to promise that I'd go away and never come back."

Pulaski County Industrial Development Corp.

Board of Directors

Jim Johnson, Chairman
Ron Davis, President
Ed Staton, Secretary
George Giacometti, Treasurer
Bob Johnston, Member
Jack Engelkes, Member

Largest Stockholders — Shares*

Cannon Express Corp., Springdale — 693
P.A.M. Transportation Services Inc., Tontitown — 679
Bobbi Belle Ferguson, North Little Rock — 601
Charles David Johnson, Tumbling Shoals — 553
Ronald F. and Sharon Davis, Lonoke — 550
Continental Express Inc., Little Rock — 539
Arthur Beech, Little Rock — 535

Thomas H. Lyons, Sherwood — 478
DeHaven-Todd Limited Partnership, Maumelle — 469
George L. Wolff, Little Rock — 408

*According to PCIDC, "A" stock has a market price of $450 per share, and is identified as 100 percent corporate risk. All other forms of stock are collateralized to some percent. Preferred stock is non-voting and carries a par value of $100 per share. PCIDC issues several other types of stock, as well. Therefore, the value of any individual's holding is difficult to determine.

Source: PCIDC

Further Reading

Click here to read how the Pulaski County Industrial Development Corp. has allowed investors to receive tax breaks for investing in Florida companies.