Posted 7/21/2014 12:00 am
Updated 5 months ago
A dispute over the $1.35 million acquisition of a treasure trove of historic Major League Baseball images recently took the field in Pulaski County Circuit Court.
The heir and former keeper of the famed George Burke & George Brace Collection of photographic negatives sued North Little Rock businessman John Rogers and his Sports Card Plus Inc.
The litigation rises above a typical collection suit because Rogers and his business have been touched by a federal investigation.
Mary Brace, daughter of the late George Brace, alleges that Rogers breached the June 2012 contract by which he purchased the negatives by missing an $85,000 payment that was due on April 1 and that she is still owed $765,000.
Neither Rogers nor his lawyer, Blake Hendrix of Little Rock, could be reached for comment.
A five-page purchase agreement regarding the collection included as part of the July 11 lawsuit indicates that Brace received $400,000 up front and $100,000 six months later.
The remaining $850,000 was to be paid in annual installments of $85,000 due every April 1 from 2013 to 2022. The complaint alleges that Rogers made the first of those 10 payments in 2013 and then defaulted when the second came due this spring.
According to the lawsuit, Rogers also failed to deliver to Brace a digital copy of the complete collection as promised in the sales agreement.
The epic collection consists of an estimated 250,000 original negatives. The images contained in the cache include more than 10,000 National and American League players, ranging from superstars to virtual unknowns who played at Chicago’s Wrigley Field or Comiskey Park between 1929 and 1994.
Brace’s lawsuit also alleges that Rogers lied repeatedly about retaining the entire collection.
The subject came up after Brace learned that search warrants were executed at Rogers’ business and home on Jan. 28 as part of a criminal investigation conducted by federal prosecutors in Chicago.
Accompanying legal concerns were “anecdotal reports of Rogers’ uncertain financial situation,” according to the complaint.
Rogers called Brace on Feb. 6 with assurances that he intended to make the scheduled April 1 payment as well as provide the contractually promised digitalized copy of the Brace Collection.
An incomplete and technically poor quality copy of the collection received from Rogers on Feb. 21 only increased concerns.
Under terms of the sales agreement, Rogers isn’t prohibited from selling pieces of the collection, presumably after first making copies for Brace.
Auction records obtained by Arkansas Business indicate that hundreds of negatives from the Brace Collection indeed have been sold. Sources in the baseball memorabilia community indicate that hundreds more have changed hands via private transactions.
As part of her lawsuit, Brace also asked the court for a temporary injunction to stop Rogers from selling any more of the collection.
“The only reason we’re filing for the injunction is to protect the asset,” said Sammie Strange Jr., a Little Rock lawyer who filed the suit for Brace. “Once he missed the payment, he is now in default, and she now has a security interest in the collection.”
On March 31, the day before the 2014 payment was due, Carmen Smith, then in-house counsel for Rogers Photo Archive, emailed Brace and her attorney to say that the money wouldn’t be coming, citing problems with the copyrights to some of the collection.
“I have advised John to withhold the 04/01/2014 payment to Ms. Brace until we get this resolved. Additionally, given the vast number of problems that we have encountered in such a short period of time, the best resolution may be to return the collection, unwind the agreement and repay any funds already paid.”
Smith, a board commissioner at Central Arkansas Water, no longer works for Rogers. She couldn’t be reached for comment on the email.
“This was the first time allegations related to copyright issues had ever been raised in the almost two years since the contract was executed,” Brace said in a sworn affidavit included in her lawsuit.
Rogers hasn’t provided any documentation of the alleged copyright issues despite her requests for such, according to the complaint.
In a 2011 interview with the Arkansas Democrat-Gazette, Rogers said revenue from selling and leasing newspaper and archive images was $8 million in 2010 and on track for $10 million in 2011.
The civil litigation against Rogers comes less than six months after FBI agents searched his business and monster 12,500-SF home in connection with a mystery criminal investigation.
Agents carted away boxes and boxes of material seized from the North Little Rock properties under the authority of a sealed search warrant.
No charges against Rogers have resulted from that visit, which is connected to the sports memorabilia fraud investigation of Mastro Auctions, based in suburban Chicago.
The mushrooming Mastro investigation resulted in the July 2012 indictments of William Mastro, the company’s founder, chairman and CEO; Doug Allen, president and chief operating officer; and Mark Theotikos, vice president.
The case is flowing through U.S. District Court in the Northern District of Illinois.
Mastro pleaded guilty to one count of fraud in October and awaits sentencing. Allen is scheduled to go to trial on Sept. 8, and Theotikos, who had pleaded not guilty, is scheduled to change his plea at a hearing set for July 28.
Allen and Theotikos formed Legendary Auctions after Mastros Auctions closed in 2009 under the cloud of the FBI investigation that led to the 2012 indictments. Rogers is an investor in Legendary Auctions, headquartered in the Chicago suburb of Lansing.
During its day, Mastros was touted as the country’s largest sports memorabilia auction house. It was at a Mastro auction in 2008 that Rogers bought a rare Honus Wagner baseball card for a reported $1.62 million.