Ted Rollins
The original management team behind Campus Crest Communities, which included CEO Ted Rollins, comes under blistering criticism in a recent article at a major business-news Web site.Seeking Alpha published the article on December 30, 2014, under the headline, "Management Overhaul=Long-Needed Transformation at Campus Crest, 50% Upside for Shareholders." It uses terms such as "blunders" and "loss of credibility" to describe Rollins' performance.
Rollins has been the subject of numerous posts here at Legal Schnauzer, in part because of his central role in a Shelby County, Alabama, divorce case that we have described as perhaps the most grotesque cheat job we've seen in a courtroom. Also, Rollins has been a major business figure in Alabama, with student-housing developments at four state universities (South Alabama, Troy, Jacksonville State, and Auburn)--plus, his primary corporate law firm has been Bradley Arant, of Birmingham.
Ted Rollins' former wife, Sherry Carroll Rollins, and the couple's two daughters are Birmingham residents.
Here is a summary of what Seeking Alpha reported about the performance of Rollins and his managers:
* Campus Crest Communities' previous management team was removed on the back of multiple blunders and loss of credibility.
* The company's operations are getting streamlined by an exit from construction and development as well as from multiple joint-ventures.
* The dividend payout is finally reduced to a prudent and sustainable level.
* Recently announced actions would solve most of the relevant problems and should close the huge discount to peers.
On the subject of credibility, Seeking Alpha would have known Ted Rollins has shortcomings in that department if it had followed our coverage of the Rollins v. Rollins divorce case. We presented overwhelming evidence that both Ted Rollins and his billionaire cousin, R. Randall Rollins, committed perjury during discovery proceedings in the divorce case.
All of this should not have been news at the highest levels of the nation's financial system. We notified a Wall Street analyst named Paula Poskon, of Robert W. Baird and Company, about some of the ugliness in Mr. Rollins' background, and after initially exclaiming, "Oh, my God!" she tried to strong arm me into not using her quotes.
If financial elites had paid attention to our reporting, perhaps Seeking Alpha would not have recently written this about Campus Crest Communities:
The not so good work by the prior management with multiple value-destroying blunders led to the loss of investor confidence. Previously unresolved portfolio acquisitions, disappointing new deliveries, heavy reliance on joint ventures, underperforming international redevelopments are only some of the issues faced by the company.
On top of this, the earlier dividend payout was at a rate above the Funds From Operation (FFO), which implied high risk of its cut and created another source of investor confusion.
Until recently, CCG was construction and development company as well as owner and operator of student properties. Development activities led to cash flow volatility and elevated risk, when at the same time REIT investors typically want high and stable dividend income. This resulted in a mismatch in terms of what investors wanted and what the company offered, which contributed to CCG's discount to peers.
Recent business restructuring activities gave rise to a number of impairments and one-off charges, which temporary depress accounting earning creating negative sentiment around the company.
