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Trent-Legacy Capital Split Goes to Court

5 min read

The corporate marriage of Trent Capital Management and Legacy Capital Wealth Partners has unraveled after less than three years.

The two Little Rock independent registered investment advisory firms merged under the Legacy Capital banner on Dec. 31, 2020. At the time, their combined assets under management totaled more than $525 million and in-force life insurance surpassed $2.5 billion.

But a boardroom dispute over financial dealings with a Little Rock competitor, Naviter Wealth, culminated in the firing of David Trent as a managing partner at Legacy Capital in June. Last month, internal contention boiled over into Pulaski County Circuit Court.

Legacy Capital officials claim they have proof of Trent’s corporate infidelity with Naviter in the form of email communications, audio recordings and more, according to court filings.

David Trent

Company officials allege the evidence they uncovered exposed Trent’s plan to move $26 million to $55 million worth of accounts to Naviter as part of a scheme to “surreptitiously steal clients” that dated back to July 2022.

According to court filings, Trent lied about his role in the loss of clients to Naviter when company officials confronted him.

Legacy Capital also alleged that Trent spent company money to prospect for new clients on behalf of Naviter.

Matt Jones, president of Legacy Capital, and Bentley Blackmon, CEO of Naviter Wealth, declined comment. Trent couldn’t be reached for comment.

Matt Jones

A week after Trent was fired, Legacy Capital showed him a draft copy of a lawsuit it intended to file unless he agreed to sell his stake in the company and effectively unwind the merger.

That would-be lawsuit became the foundation of the company’s counterclaim after Trent filed his lawsuit first.

Tearing the Sheets

Trent sued Legacy Capital and its owners on July 12. He asked that Legacy Capital be dissolved, a judicial dissolution request that included unspecified allegations of illegal, oppressive or fraudulent actions that Legacy Capital denies.

Trent’s complaint alleges that agreements associated with the 2020 merger contain noncompete provisions that are invalid and unenforceable under Arkansas law.

A day after Trent filed suit, Legacy Capital answered his complaint and filed counterclaims of fraud and breach of fiduciary duty against him.

Company officials also alleged Trent breached the asset purchase agreement and the confidentiality, noncompetition and nonsolicitation agreement associated with the merger. Legacy Capital maintains that Trent is bound by the terms of the agreements, which are valid and enforceable under Arkansas law.

The two agreements in heavily redacted form are part of the court record, and both sides are arguing whether the document dispute is subject to arbitration rather than court.

Trent hasn’t answered Legacy’s counterclaims.

In his complaint, Trent requested a temporary injunction until a dispute over an estimated $148,000 in quarterly profit distributions can be resolved. He also claims future quarterly profit distributions until his buyout is negotiated.

The company deposited the June 30 quarterly profit distribution withheld from Trent in a separate account until the legal wrangling is resolved.

Legacy claimed it is entitled under the venture’s operating agreement to withhold quarterly profit payments from Trent to offset money owed.

Among Trent’s outside business interests that attracted the attention of Legacy Capital: Absolute Capital LLC.

His role with the firm is described as venture capital and private equity principal.

The business consulting and services venture, focused on acquiring and owning small businesses, was launched last year by Trent and his son, Carter.

History & Expansion

Trent’s lawsuit was filed on behalf of himself and his Trent Capital Management, which owns a 32.8% stake in Legacy Capital.

Jason Prather

Trent Capital was formed in 1996; Legacy Capital traces its roots back to 1977.

The balance of Legacy Capital ownership is divided among Jones, president of Legacy Capital; and Jason Prather, managing principal of Legacy, 24% each; Merchant Investment Management LLC of New York, 12%; and Jay Strickland, senior wealth adviser at Legacy; and Morgan Sizer, Legacy’s chief investment officer; 3.6% each.

Legacy Capital Wealth Ownership

Trent Capital Management Inc., David Trent


Matt Jones, president


Jason Prather, managing principal


Merchant Investment Management LLC, New York


Jay Strickland, senior wealth adviser


Morgan Sizer, chief investment officer


Source: David Trent’s complaint filed in Pulaski County Circuit Court

Trent gained a 40% stake in Legacy Capital as part of the 2020 merger but later sold Strickland and Sizer their shares.

Trent also received $850,000 when the merger was completed in addition to becoming a partner and officer at Legacy Capital, according to court filings.

That money represented a 20% purchase of Trent Capital’s assets, according to court filings.

Trent Capital’s growth in total assets under management grew more than 59% during 2013-20:

► 2013: $126 million

► 2014: $137.4 million

► 2015: $151.3 million

► 2016: $143.6 million

► 2017: $158.8 million

► 2018: $175.4 million

► 2019: $195.7 million

► 2020: $200.8 million

A few months before the two firms became one, Legacy Capital Wealth Partners ranked No. 20 on Arkansas Business’ annual list of money managers headquartered in Arkansas, with total assets under management of $293.3 million. Trent Capital Management ranked No. 24 at $200.8 million.

By October 2022, Legacy Capital Wealth Partners managed total assets of $560 million and ranked No. 16.

Earlier this year, the company announced the addition of three staffers from Arvest Wealth Man-agement that boosted its total assets under management to more than $1 billion.

Brian Wood, Michael Peebles and DeAnn Gann provided the foundation for Legacy’s northwest Arkansas office in Rogers.

Legacy Capital became an independent wealth management firm in March 2018.

However, its lineage can be traced back more than 40 years to when Frank McGehee established McGehee & Associates.

The venture morphed into Legacy Capital Group Arkansas Inc., a financial and insurance adviser concentrating in the areas of estate, business succession and insurance planning.

Wealth management became part of the firm’s menu of services when Jones joined the company in 1997.

Two years down the road, Legacy Capital was acquired by National Financial Partners of New York, which later became a publicly traded financial services corporation.

Legacy Capital operated as a wholly owned subsidiary of NFP until 2009 when Jones, Prather and other members of local management repurchased it. By then, the firm’s wealth management division’s assets under management had grown to almost $140 million.

In July 2017, Legacy Capital Group sold its sizable corporate benefits business to OneDigital Health & Benefits of Atlanta, the nation’s largest company focusing only on employee benefit services.

Filing: Partner Violated Policies

David Trent was discharged as managing principal of Legacy Capital Partners on June 2, according to a company filing with the Investment Adviser Registration Depository.

The filing with the depository, operated by the Financial Industry Regulatory Authority, states that Trent was discharged for violation of policies and procedures regarding client privacy and outside business activities.

According to Legacy Capital, Trent violated the company’s code of ethics by participating in undisclosed outside business activities.

“Certain outside business activities resulted in soliciting clients to a third party, where the participation in the outside business activity was not preapproved” by Legacy Capital, according to the FINRA filing.

Legacy Capital also noted that Trent violated its privacy policy by “sharing client-sensitive information to third parties without the intent to service clients via the agreed upon services.”

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