LITTLE ROCK — The Little Rock medical testing center that Jennings Osborne sold in 2004 is closing, the firm’s chief executive officer said in an e-mail Tuesday.
Osborne sold Arkansas Research Medical Testing to “affiliates” of the Stephens family of Little Rock for more than $24 million. The company’s name was changed to Axient Research.
Osborne sued the affiliates in 2008 over what he called gross mismanagement of the firm, that denied him millions of dollars in consulting fees.
Axient has been working since late 2008 “to resolve defaults under its loan agreement,” Tim Derrington, Axient’s chairman and chief executive, said in the e-mail.
“The bank has now decided to call the loan and take control of the assets of the company,” Derrington’s email said. “As a result, Axient Research has been forced to lay off a significant number of its employees and curtail business operations effective immediately. Because of the suddenness of the bank’s actions, there was no advance notice of the steps that the company was required to take.”
Osborne has been a high profile political campaign contributor over the years. He also has been known for extravagant Christmas-light displays at his residence.
Frank Thomas, a spokesman for Stephens Inc., said in a prepared statement that “Stephens understands that Axient Research has been forced by its bank to significantly scale back its operations.”
Warren Stephens, who owns Little Rock-based Stephens Inc., a major investment banking firm, testified in the 2009 trial of the lawsuit brought by Osborne. Warren Stephens was not named as a defendant.
The Stephens affiliates“will lose their entire investment,” Thomas said.
“Axient was the unfortunate casualty of very challenging economic conditions and to the changing medical testing environment,” Thomas said.
Derrington didn’t respond to an e-mail seeking more information and could not be reached at Axient’s office.
Osborne, who worked as a consultant with Axient for several years after the sale, said that Axient had more than 40 employees.
The executives at Axient never had a grasp of how to run the business, which focuses on “phase one” testing for pharmaceutical companies to determine if the medications are safe, Osborne said.
“I hate to see it go out this way,” said Osborne, who owned Arkansas Research Medical Testing from 1968 until 2004. “There had been rumors for a couple of months [about the business closing].”
Osborne sued the Stephenses in 2008, saying that because of gross mismanagement, the company was not as successful as it could have been, costing Osborne millions of dollars in promised consulting fees. A jury eventually awarded Osborne an additional $3 million.
Osborne said last summer that he planned to opena similar company this year, Osborne Research Center. The new business should open in the next month, Osborne said.
For several years, Osborne used his three-house estate on Cantrell Road to showcase his display of more than 3 million lights, but the Arkansas Supreme Court ordered him in 1994 to reduce the display because of the traffic jams it caused. Osborne then donated use of the lights to Walt Disney World near Orlando, Fla.
Osborne also has provided Christmas light displays at Graceland, Elvis Presley’s home in Memphis; the River Market District in Little Rock; the state Capitol; and Bathhouse Row in Hot Springs.
Business, Pages 27 on 02/10/2010