Pulaski County Circuit Judge Tim Fox awarded Christopher Cathey almost $1.3 million in damages Friday for loans he made to photo archivist John Rogers of North Little Rock.
No one representing Rogers was in the courtroom Friday. Brett Myers, a Dallas attorney, said in a telephone interview that he "technically" still represents Rogers but declined to say why he wasn't present at the hearing.
Because no one defended Rogers, Fox considered all the allegations against Rogers to be true.
Damages awarded to Cathey included more than $520,000, plus $735,000 in punitive damages.
Cathey, a childhood friend of Rogers, sued Rogers and his Sports Card Plus business in February. In the lawsuit, Cathey said he was owed more than $400,000 in principal and interest for loans he made to Rogers for an investment in the photo archives of The Oklahoman, to buy sports cards and to "keep the doors open."
Cathey also personally guaranteed other loans that Rogers received, including a partial guarantee on a $14 million loan made to Rogers by First Arkansas Bank & Trust of Jacksonville. Cathey faces a potential loss of $2.2 million on that guarantee, the lawsuit said.
Cathey, a chiropractor with offices in Little Rock and North Little Rock, told Fox that he had made previous investments with Rogers and was always repaid.
Rogers told Cathey that he owned the archives of The Oklahoman, an Oklahoma City newspaper, but he didn't, Cathey said.
"So he flat-out lied to you?" Fox asked Cathey.
"Yes," Cathey said.
In an interview after the hearing, Patrick James, Cathey's attorney, speculated that much of Rogers' photo archive business was a Ponzi scheme, where he paid off past investors with the funds raised from more recent investors.
"As with most Ponzi schemes, it caught up with him in the end," James said.
A lawsuit filed in January by Mac Hogan, a former Rogers partner, also claimed Rogers was involved in a Ponzi scheme.
Rogers still faces 12 other civil lawsuits in Pulaski County concerning his former photo archive businesses. The lawsuits are seeking more than $40 million in damages.
James was not optimistic about getting Cathey's money back.
"But there are a lot of assets out there and if the assets were to sell at what we hope would be fair market value, we could see a possibility of being made whole," James said.
Michael McAfee, the receiver in the cases against Rogers, is in the process of making digital versions of newspaper photo archives that Rogers acquired. McAfee's operation had revenue of about $54,000 in the second quarter and net income of $39,000.
Business on 09/05/2015
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