Struggle for Control

Struggle for Control

By David R. Corder

Associate Editor

By mid-summer 2002, The Wilson Co. had become one of the most prolific developers of affordable multifamily housing in Florida. The expansion into this line of development about 10 years earlier had greatly enhanced the value of the commercial real estate empire Jack Wilson had built over the past two decades.

Today, the Tampa-based company and its affiliates own and manage 34 affordable apartment communities that report an overall occupancy rate in excess of 90%.

But nearly three years ago Wilson made a decision that set in motion a chain of events that might threaten his empire. Then, at age 62, he signed a durable power of attorney that gave majority control over Wilson Co. and its affiliates to Carolyn Wilson, his wife of 43 years. He, his wife and his three trusted minority partners - Debra Koehler, Gary Welch and Chris Bowers - quietly guarded the decision.

Few people knew that Jack Wilson, once chairman of the Greater Tampa Chamber of Commerce and chairman of the 2001 Tampa Bay Area Super Bowl Task Force, had developed memory problems so severe it appeared he suffered Alzheimer's disease. The Harvard Business School graduate, admired by colleagues for his motivational and deal-making skills, struggled with routine tasks.

In the months that followed the change of control, Carolyn Wilson and the minority partners explored a possible sale of Wilson Co.'s assets. Wachovia Bank submitted a written bid. The bank suggested in a meeting with Koehler that Wilson Co. and its affiliates had a market value of about $45 million.

When the bank offered a bid of only $18 million, the wife and minority partners hired Dick Beard, the Tampa real estate developer and prolific Republican campaign contributor, to market the company.

By the end of 2002, however, there were signs of tension between Carolyn Wilson and the minority partners. The conflict escalated when she declared herself president of the companies under authority of the power of attorney. Over the next nine months, the relationship spun out of control.

In late October 2003, the longtime minority partners - Koehler, Welch and Bowers - were terminated without cause, according to court documents. Carolyn Wilson demanded they redeem their minority ownership in Wilson Commercial Management Co., Wilson Co.'s commercial real estate management division, and TWC Holding Co., the company's affordable housing division.

When they refused, she sued them in the Hillsborough County court on charges they breached two partnerships agreements signed in 1997 and 1998.

In response, they countersued and invoked a disability clause written into the two partnership agreements. They claim that Jack Wilson's disability required the transfer for redistribution of his 70% ownership in Wilson Commercial Management and 60% ownership in TWC Holding. They contend the clause only requires either of the signers to prove another had been disabled for 24 consecutive months.

They say Jack Wilson became lost driving four blocks downtown on a route he'd previously taken numerous times, according to records. On another occasion, Cecilia Ferman, wife of Jim Ferman, told Welch it appeared Wilson was inebriated at his February 2001 induction into the Tampa Bay Business Hall of Fame.

"In my entire 38 years, I've never, ever seen Jack Wilson under 'the influence,' " Welch says he told her.

The disability clause is a hotly contested issue, because it appeared sometime after the first draft of the two partnership agreements.

In depositions, GrayRobinson PA attorney Dan Mitchell, who represents Carolyn Wilson and the companies she controls, questioned Koehler and Welch about the clause's origination. Neither of them claimed to know anything about the clause's insertion into subsequent drafts.

In deposition, Koehler contends she suspects that Tampa attorney Steve Mitchell, Jack Wilson's lawyer then and now Tampa managing partner at Squire Sanders & Dempsey LLP, inserted it into the subsequent contract drafts. But she says she does not know why.

"By April of 2001, Jack was disabled within the meaning of the shareholder agreements," Koehler says. "I looked at Jack's memory issues as a declining debilitating set of circumstances. And there were things that led up to by the time of April where he could not perform any of the duties that were his responsibilities as president."

Ludicrous, Carolyn Wilson argues.

"The reason Jack Wilson granted me power of attorney was because he wanted to provide a means for me to exercise his discretionary powers over his personal and business affairs, including but not limited to the operations of the corporations," she states in an affidavit. "Even though Jack Wilson granted me the power of attorney, he continued his duties as the president and sole director of the corporation until Dec. 3, 2002."

Neither Koehler nor Welch nor Bowers responded to requests for comment. Their attorney, Akerman Senterfitt shareholder Les Joughin, says, "Our clients will rest on the papers we've filed with the court."

Carolyn Wilson referred all questions to GrayRobinson attorney Michael Nolan, who serves as the Wilson Co. and its affiliates' outside general counsel. He says it may be difficult to determine exactly how the disability clause originated. It would require Mitchell in cooperation with his former client to waive attorney-client privilege.

In September last year, Carolyn Wilson and the affiliated companies suffered a setback in their claim against the minority partners. Circuit Judge E. Lamar Battles indicated he favored limited discovery of Jack Wilson's medical records.

"With appropriate protections, it would seem clear to me that if this goes forward, that they're going to be entitled to that material," Battles told Wilson attorney Dan Mitchell at a Sept. 30 hearing. "They're going to be entitled to discovery to talk about that condition."

In early October, Battles granted the minority partners' motion to compel disclosure of Jack Wilson's medical records. But he also offered assurances he would review those records only in chambers.

The next month the Wilson Co. affiliates suffered another setback. Battles rejected a motion to dismiss the minority partners' counterclaim. Then he granted the minority partners authority to proceed on their counterclaim against the Wilson Co. affiliates.

"This does not end the case, however," Battles wrote in a Nov. 2 order. "It merely advances it to consideration (of the disability clause), which provides for the resolution of 'any dispute regarding the existence, extent or continuance of a disability.' Clearly, there is such a dispute, and it cannot be resolved by a motion for summary judgment or a motion to dismiss."

Wilson Co. attorney Dan Mitchell has appealed Battles' rulings to the 2nd District Court of Appeal.

Acting on the trial judge's rulings, Joughin issued subpoenas to a number of physicians who treated Jack Wilson.

In response, Dan Mitchell objected and asked Battles for a stay of the state court actions pending appellate review. Battles granted a 45-day stay. A decision is pending.

Meanwhile, business continues as usual for the Wilson Co. and its affiliates, says GrayRobinson's Nolan.

Carolyn Wilson continues to direct the company's day-to-day operations with help from the couple's daughter, Ashley, Nolan says. The daughter, who worked for years as the affordable housing division's compliance director, now serves as a company vice president.

In addition, the couple's son, Clay, handles all responsibilities related to health and environmental issues.

Longtime Wilson Co. employee Brenda Storey, who now serves as chief financial officer, and a solid team of middle managers assist the family executives, Nolan says.

"Jack picked a lot of good people," Nolan says. "The company is doing a lot better than even a couple of years ago."

As for the minority partners, Welch testified at deposition that he no longer works in the real estate industry. The former graduate school classmate of Jack Wilson now serves as a primary caregiver for his ailing mother.

Koehler now is the president of Tampa's Atlantic American Realty Group, a condominium-conversion company, according to court records. She shares ownership with Atlantic American Capital Group LLC, an investment group that includes Tampa investor J. Patrick Michael.

It's unclear what Bowers is now doing.