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The company marriage of Trent Capital Administration and Legacy Capital Wealth Companions has unraveled after lower than three years.
The 2 Little Rock impartial registered funding advisory corporations merged underneath the Legacy Capital banner on Dec. 31, 2020. On the time, their mixed belongings underneath administration totaled greater than $525 million and in-force life insurance coverage surpassed $2.5 billion.
However a boardroom dispute over monetary dealings with a Little Rock competitor, Naviter Wealth, culminated within the firing of David Trent as a managing accomplice at Legacy Capital in June. Final month, inside competition boiled over into Pulaski County Circuit Courtroom.
Legacy Capital officers declare they’ve proof of Trent’s company infidelity with Naviter within the type of e-mail communications, audio recordings and extra, in accordance with court docket filings.
Firm officers allege the proof they uncovered uncovered Trent’s plan to maneuver $26 million to $55 million value of accounts to Naviter as a part of a scheme to “surreptitiously steal purchasers” that dated again to July 2022.
In line with court docket filings, Trent lied about his function within the lack of purchasers to Naviter when firm officers confronted him.
Legacy Capital additionally alleged that Trent spent firm cash to prospect for brand new purchasers on behalf of Naviter.
Matt Jones, president of Legacy Capital, and Bentley Blackmon, CEO of Naviter Wealth, declined remark. Trent couldn’t be reached for remark.
Per week after Trent was fired, Legacy Capital confirmed him a draft copy of a lawsuit it supposed to file except he agreed to promote his stake within the firm and successfully unwind the merger.
That might-be lawsuit turned the muse of the corporate’s counterclaim after Trent filed his lawsuit first.
Tearing the Sheets
Trent sued Legacy Capital and its house owners on July 12. He requested that Legacy Capital be dissolved, a judicial dissolution request that included unspecified allegations of unlawful, oppressive or fraudulent actions that Legacy Capital denies.
Trent’s grievance alleges that agreements related to the 2020 merger comprise noncompete provisions which are invalid and unenforceable underneath Arkansas legislation.
A day after Trent filed swimsuit, Legacy Capital answered his grievance and filed counterclaims of fraud and breach of fiduciary obligation in opposition to him.
Firm officers additionally alleged Trent breached the asset buy settlement and the confidentiality, noncompetition and nonsolicitation settlement related to the merger. Legacy Capital maintains that Trent is sure by the phrases of the agreements, that are legitimate and enforceable underneath Arkansas legislation.
The 2 agreements in closely redacted kind are a part of the court docket file, and each side are arguing whether or not the doc dispute is topic to arbitration reasonably than court docket.
Trent hasn’t answered Legacy’s counterclaims.
In his grievance, Trent requested a brief injunction till a dispute over an estimated $148,000 in quarterly revenue distributions might be resolved. He additionally claims future quarterly revenue distributions till his buyout is negotiated.
The corporate deposited the June 30 quarterly revenue distribution withheld from Trent in a separate account till the authorized wrangling is resolved.
Legacy claimed it’s entitled underneath the enterprise’s working settlement to withhold quarterly revenue funds from Trent to offset cash owed.
Amongst Trent’s outdoors enterprise pursuits that attracted the eye of Legacy Capital: Absolute Capital LLC.
His function with the agency is described as enterprise capital and personal fairness principal.
The enterprise consulting and providers enterprise, targeted on buying and proudly owning small companies, was launched final yr by Trent and his son, Carter.
Historical past & Growth
Trent’s lawsuit was filed on behalf of himself and his Trent Capital Administration, which owns a 32.8% stake in Legacy Capital.
Trent Capital was shaped in 1996; Legacy Capital traces its roots again to 1977.
The stability of Legacy Capital possession is split amongst Jones, president of Legacy Capital; and Jason Prather, managing principal of Legacy, 24% every; Service provider Funding Administration LLC of New York, 12%; and Jay Strickland, senior wealth adviser at Legacy; and Morgan Sizer, Legacy’s chief funding officer; 3.6% every.
Legacy Capital Wealth Possession
Trent Capital Administration Inc., David Trent |
32.8% |
Matt Jones, president |
24% |
Jason Prather, managing principal |
24% |
Service provider Funding Administration LLC, New York |
12% |
Jay Strickland, senior wealth adviser |
3.6% |
Morgan Sizer, chief funding officer |
3.6% |
Supply: David Trent’s grievance filed in Pulaski County Circuit Courtroom
Trent gained a 40% stake in Legacy Capital as a part of the 2020 merger however later offered Strickland and Sizer their shares.
Trent additionally obtained $850,000 when the merger was accomplished along with changing into a accomplice and officer at Legacy Capital, in accordance with court docket filings.
That cash represented a 20% buy of Trent Capital’s belongings, in accordance with court docket filings.
Trent Capital’s development in whole belongings underneath administration grew greater than 59% throughout 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 couple of months earlier than the 2 corporations turned one, Legacy Capital Wealth Companions ranked No. 20 on Arkansas Enterprise’ annual record of cash managers headquartered in Arkansas, with whole belongings underneath administration of $293.3 million. Trent Capital Administration ranked No. 24 at $200.8 million.
By October 2022, Legacy Capital Wealth Companions managed whole belongings of $560 million and ranked No. 16.
Earlier this yr, the corporate introduced the addition of three staffers from Arvest Wealth Man-agement that boosted its whole belongings underneath administration to greater than $1 billion.
Brian Wooden, Michael Peebles and DeAnn Gann offered the muse for Legacy’s northwest Arkansas workplace in Rogers.
Legacy Capital turned an impartial wealth administration agency in March 2018.
Nevertheless, its lineage might be traced again greater than 40 years to when Frank McGehee established McGehee & Associates.
The enterprise morphed into Legacy Capital Group Arkansas Inc., a monetary and insurance coverage adviser concentrating within the areas of property, enterprise succession and insurance coverage planning.
Wealth administration turned a part of the agency’s menu of providers when Jones joined the corporate in 1997.
Two years down the highway, Legacy Capital was acquired by Nationwide Monetary Companions of New York, which later turned a publicly traded monetary providers company.
Legacy Capital operated as an entirely owned subsidiary of NFP till 2009 when Jones, Prather and different members of native administration repurchased it. By then, the agency’s wealth administration division’s belongings underneath administration had grown to nearly $140 million.
In July 2017, Legacy Capital Group offered its sizable company advantages enterprise to OneDigital Well being & Advantages of Atlanta, the nation’s largest firm focusing solely on worker profit providers.
Submitting: Companion Violated Insurance policies
David Trent was discharged as managing principal of Legacy Capital Companions on June 2, in accordance with an organization submitting with the Funding Adviser Registration Depository.
The submitting with the depository, operated by the Monetary Business Regulatory Authority, states that Trent was discharged for violation of insurance policies and procedures concerning shopper privateness and outdoors enterprise actions.
In line with Legacy Capital, Trent violated the corporate’s code of ethics by collaborating in undisclosed outdoors enterprise actions.
“Sure outdoors enterprise actions resulted in soliciting purchasers to a 3rd social gathering, the place the participation within the outdoors enterprise exercise was not preapproved” by Legacy Capital, in accordance with the FINRA submitting.
Legacy Capital additionally famous that Trent violated its privateness coverage by “sharing client-sensitive data to 3rd events with out the intent to service purchasers through the agreed upon providers.”
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