ROGERS — With luxury car sales behind him, Bill Schwyhart jumped headlong into other investments in Northwest Arkansas.
A co-developer of major commercial areas in Benton County, Schwyhart was active during the region’s boom era in the late 1990s and early 2000s.
However, Schwyhart said he knew he shouldn’t put all his money into real estate, so he invested in cutting-edge technology as well.
Listed among Schwyhart’s investment portfolio was a company once thought to have the potential to pull down more than $100 million in military contracts. Vision Technologies Inc. in Rogers controlled a patent on a camera and related mounting device for military applications. And it was recruiting shareholders.
Schwyhart, along with partner Robert Thornton, invested a total of $3 million in the company, Schwyhart said.
“I was making side investments,” Schwyhart said. “I’m an entrepreneur.”
Vision Technologies and its President and CEO Lee Thompson looked poised to win lucrative contracts and help anchor the region’s aspirations to be a technology hub, Schwyhart said. The company’s camera can focus from about a quarter of an inch to infinity and is housed in a rugged casing that can withstand the pressures of military and industrial use.
“I believe in the technology and still do,” said Schwyhart.
“None of the promises came to fruition,” he said. “It might have been a lost opportunity. ... People are losing their life savings.”
Three lawsuits highlighted the conflicts between the company and some of its investors.
In an October 2007 suit, Schwyhart and other shareholders tried to oust Thompson, citing the company’s chronic losses, concerns over a patent, Thompson’s leadership, and alleged financial improprieties by Thompson. The suit was mutually dismissed by the parties this year.
A second suit filed in June 2008 by Jeannie Fleeman and others sought recovery of $2.5 million they had invested in Vision Technologies. That suit was dismissed in June 2009.
In the third suit, Schwyhart was listed as both a plaintiff and a counter-claim defendant.
That suit, originally filed in April 2008 by the Jeannie Fleeman Revocable Trust, accused Thompson of defaulting on a $2.3 million loan from the Bank of Arkansas. The Fleeman trust sought payment of the loan, interest and fees.
Last year, the trust and the co-plaintiffs, including Schwyhart, settled the claims in exchange for Thompson dropping allegations he made in a countersuit. As part of the settlement, Vision Technologies was ordered to pay the Fleeman Trust for back rent and back taxes, and up to $3 million in gross revenue generated by the company.
At the time, Schwyhart, Thornton, Jim Neill, Jeannie Fleeman and Jim Phillips remained listed as third-party defendants in the case, accused of being co-conspirators in a plan to raid the company and destroy Vision Technologies “brick by brick.” In July of this year, the claims against Schwyhart and the co-defendants were dismissed.
Thompson, who still heads Vision Technologies, offered little comment when asked about the case.
“The lawsuit went away,” said Thompson. “We all sat down, hugged and sang ‘Kumbaya.’”
That wasn’t always the case.
The countersuit filed by Thompson in May 2009 accused the “conspirators” of adding at least two dead people to the list of plaintiffs who were dissatisfied with Thompson.
He also alleged that a court order that forced his temporary ouster as president and CEO in October 2007 was based on “false information and incomplete testimony.” An attorney representing Thompson was threatened with physical violence and forced out of a shareholder’s meeting, according to the countersuit.
Thompson also said that while he was out of office, someone opened a safe that stored confidential contracts with the U.S. Department of Defense and left documents strewn around his office.
Schwyhart and other defendants deny the claim that the company’s safe was ransacked.
“We never went into the safe. It didn’t happen,” said Schwyhart.
The countersuit also accused the defendants of trying to wrest control of the company from Thompson through legal and financial pressure and to force Thompson to hand over valuable patents on the technology.
From September 2005 to May 2008, Fleeman was chairman of the board of both Vision Technologies and Bank of Arkansas.
According to the countersuit, Fleeman used her position and knowledge “to put offensive economic pressure on [Vision Technologies], to slander and embarrass the current [Vision Technologies] management, to file false and frivolous lawsuits in an effort to coerce and extort concessions from [Vision Technologies].”
The goal of the “conspiracy” was to pressure the company into transferring its rights and assets to Fleeman, the countersuit alleges.
Neill, former vice president of the company, dismissed Thompson’s complaints as “bull crap.”
“The whole goal of the suit was to gain information for the shareholders,” Neill said. “The bottom line is, the shareholders invested a lot of money and they’re entitled to information. Shareholders had no clue of what was going on.”
Phillips, an innovator in the fields of telecommunications and digital imaging, and Thornton, Schwyhart’s longtime business partner, declined comment. Fleeman did not return repeated calls for comments.
Contrary to published media accounts, the company was not landing multimillion-dollar contracts, he said. In fact, the company has never had a positive cash flow, said Neill.
One of the goals of the lawsuit, Neill said, was to oust Thompson and replace him with new management that could enhance the performance of the company.
“Bill [Schwyhart] sued to gain control of the company,” said Neill.
Schwyhart, Neill said, was involved in Vision Technologies because he wanted to broaden his portfolio.
“The goal was to diversify and get into technologies other than real estate,” said Neill. Like the other shareholders, Schwyhart wanted a return on his investment.
“The prime goal was for the shareholders to be compensated,” said Neill. “They invested to make money.”