Bank sues Athletic World, brother of late founder
Posted on Tuesday, July 22, 2008
URL: http://www.nwanews.com/nwat/News/67375/
The Bank of Fayetteville filed a lawsuit Monday against Athletic World Advertising and Brick Wade Ogden, the brother of the company’s founder, the late Greg Ogden.
The Fayetteville-based company is having cash flow problems and its ownership may soon change, according to the lawsuit.
The bank loaned $ 1. 03 million to Ogden on Dec. 12, 2006. The debt went into default after the company stopped making payments to Ogden required under a redemption agreement, the suit alleges. Ogden can’t pay the debt without the payments from the company, the suit claims.
In December 2000, Ogden sold his stock in the company for payments totaling $ 1. 75 million over 10 years. The redemption agreement requires the company to make substantial monthly payments to Ogden through 2010.
Ogden assigned his interest in the agreement to the bank as collateral on his loan. Ogden lives in Amsterdam, Netherlands. He is a former resident of Washington County, according to the lawsuit.
As of July 21, the total amount due on the loan is $ 698, 494 and the balance due on the redemption agreement is $ 768, 393, according to the complaint.
The bank alleges the company is guilty of breech of contract for failing to make required payments under the redemption agreement. The bank seeks a default judgment against both Ogden and the company.
According to the complaint, the company’s acting chief executive officer, Terry Prefano, told bank officials the following on July 16:
• The company does not have the cash flow to make payments under the agreement.
• There would soon be a change in control of the company.
• There would not be enough money after the change to pay the company’s redemption agreement debt to Ogden.
Prefano would not comment on the pending litigation or the financial status of the company. He said only that the ownership of the company is controlled by the estate of the late Greg Ogden of Fayetteville.
Ogden died Aug. 18 at the University of Illinois Medical Center in Chicago. He was owner of Athletic World Advertising and vice president of marketing and membership services at Sam’s Club.