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F1 FULL BLACK
COLUMBIA • SOUTH CAROLINA
SUNDAY BUSINESS APRIL 6, 2003 • SECTION F
S.C.
Economy
Watch
HomeGold’s luster fades
THIS WEEK
WHAT S.C.
after millions in losses
LAWYERS $280 million in debt
EARN and key assets gone,
Lawyers rank among the company looks to
highest-paid professionals in
South Carolina, but their
survive bankruptcy
pay was lower than the
national average in 2001. By R. KEVIN DIETRICH
and CHRIS ROBERTS
Number Avg. Staff Writers
State lawyers* salary
HomeGold Financial Inc.
1. Calif. 58.3 $104,900 thrived on people who couldn’t pay
2. D.C. 22.6 $102,780 their bills.
Today, it can’t pay its bills.
3. Utah 3.2 $102,340 The Columbia company, one of
Others in the middle the nation’s 15 largest “sub-prime”
lenders, filed for bankruptcy pro-
17. S.C. 5.1 $86,670 tection last week.
22. N.C. 8.5 $84,650 Since the 1990s, bankruptcy has
claimed nearly three-fifths of the
26. Georgia 12.0 $82,380 publicly traded companies that
Bottom three made high-interest loans to home-
owners with marginal credit ratings.
49. S.D. 0.7 $59,240 Most of those companies saw
50. N.D. 0.6 $58,840 their profits pinched by rising fore-
closure rates and lower interest
51. Wyo. 0.7 $57,710 rates.
U.S. avg. 490 $69,030 “This has happened with a lot of
subprime lenders,” Columbia bank-
* Thousands of lawyers ruptcy attorney Gene Trotter said.
SOURCE: U.S. Bureau of Labor Statistics “A lot of them end up in liquidation
if they can’t come up with a viable
plan” to reorganize their debt.
Roughly 330 students who sur- But HomeGold’s story is dif-
vived three years of chasing paper ferent. Its demise could hurt thou-
will graduate next month from sands of S.C. residents who in-
USC’s law school. vested millions through one of the
If they’re like last year’s col- CHRISTOPHER ALUKA BERRY/SPECIAL TO THE STATE
company’s subsidiaries.
lection of newly minted lawyers, Columbia-based HomeGold Financial Inc. filed for bankruptcy protection, the latest of many subprime lenders to do so. And HomeGold’s story is com-
they’ll start work at an average an- plicated by its recent whirlwind of
nual salary of $52,000, according management. In an effort to survive,
to law dean John E. Montgomery’s
message to prospective students
Carolina Investors held HOW HOMEGOLD TURNED
TO DUST
HomeGold ceded control to a chief
executive officer who was paid mil-
lions of dollars while the company
on the Web.
That’s nearly double the annual
salary of the average S.C. resident
with a full-time job — regardless of
community’s life savings Its stock price plunged…
$20 …as profits became losses…
continued to lose tens of millions.
Then, HomeGold loaned its CEO
the money that he used to buy the
$18 Year Net profit/loss company’s major assets and leave.
the job type or level of experience. By JOE GUY COLLIER they were my friends.”
1995 $657,000 Between 2000 and 2002, six
And their income will keep ris- Staff Writer About 8,000 investors, many of $16 1996 $10,095,000 chief financial officers, two chief
ing. The average lawyer in South them from Pickens, Anderson and
$14 1997 $11,253,000 lawyers and the company’s outside
Carolina earned $86,670 during PICKENS — Mellie Whitlock, a 90- Greenville counties, have more
1998 -$57,745,000 accounting firm came and went.
2001, according to the U.S. Bureau year-old Pickens County retiree, than $275 million in accounts with $12 1999 $1,815,000 Today, HomeGold is reeling
of Labor Statistics survey. (If has lost faith in Carolina Investors Carolina Investors.
$10 2000 -$29,812,000 from:
you’re keeping up with pay by the Inc. She fears she may have lost The company sold investment
2001 -$73,599,000 ■þInstability through financial
hour, as lawyers love to do, it’s her money, too. certificates that promised annual $8 2002* -$41,966,000 losses and a tumbling stock price.
$41.67 per hour.) Whitlock, a former shop owner returns of 6 percent to 8 percent. •Through 11 months
Only chief executive officers who still ballroom dances once a Several investors said they $6 The company has lost at least
and a variety of medical-related oc- week, purchased more than knew the money wasn’t insured 0.6 $200 million since 1998, when its
$4 0.07
cupations have higher average $500,000 worth of notes and bonds but the company’s close commu- cents
cent financial slide began, according to
salaries in South Carolina. from the company. nity ties made them feel safe. $2 its filings with the federal Securi-
If those graduates stay in the But Carolina Investors closed Carolina Investors’ main ties and Exchange Commission.
$0 Three-fourths of the losses came af-
state and pass the bar exam (a three- its offices two weeks ago. Its par- branch was located in a stately
4/4/03
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day test given in July and February), ent firm, HomeGold Financial Inc., brick building in downtown Pick- ter 2000, when Ronald J. Sheppard
they will join more than 5,000 has filed for Chapter 11 bank- ens. The company threw summer took over as chief executive officer.
lawyers in the state. (There’s also an ruptcy protection. barbecues at the nearby Easley HomeGold’s stock is virtually
additional 500 or so judges and mag- Whitlock said she’s not sure Armory. Last Christmas, it sent in- worthless. At its 1996 peak, one
what to think. Carolina Investors,
…but the new boss prospered. share cost $20. On Friday, $20
istrates in South Carolina, although vestors Winn Dixie gift certificates.
not all magistrates are lawyers.) which started in Pickens County, Pickens residents now are re- $208,731: What John M. Sterling earned in 1999, would have bought 3,333 shares.
It adds up to one lawyer for every has been a part of the community ferring to Carolina Investors as his last full year as CEO. HomeGold’s March 31 bank-
385 full-time workers in South Car- for 40 years. their Enron, referring to the scan- ruptcy filing listed more than $280
$1,358,758: What Ronald J. Sheppard earned in 2001,
olina. Nationally, there’s one lawyer “I know the people in there per-
for every 300 working Americans. sonally,” Whitlock said. “I thought his first full year as CEO.
SEE INVESTORS PAGE F3 SOURCE: Securities and Exchange Commission filings STEVEN A. LONG/THE STATE SEE HOMEGOLD PAGE F3
Washington, D.C., has the
biggest concentration of lawyers
by far, about one per 14 full-time
workers. New York was tops
among states, at one lawyer per
158 workers. Indiana was last,
with one lawyer per 622 workers.
Small town sheds few tears over Kmart’s closing
As is the case in many occupa- By CLARE RAMSEY While there are regrets over
tions, South Carolina’s lawyers WA L T E R B O R O Staff Writer the loss of about 80 jobs, though,
earn less than the national aver- the buzz from city leaders and
age. The average lawyer nation- The seat of Colleton County is WALTERBORO — Bargain hunters residents about what may replace
wide earned $91,920 during 2001 losing its Kmart. have picked over much of the mer- the store has all but drowned out
— or $42.67 an hour. BAMBERG
chandise at the Kmart here, but murmurs about the Big K’s clos-
The average pay for an S.C. 95 what’s left in the store is for sale ing.
COUNTY
lawyer ranked 17th nationally. It DORCHESTER — even the shelves themselves. Those who are marking
COUNTY
was nearly $20,000 a year less than The Lowcountry store is lock- Kmart’s passing are doing so in
places it pays the most to be a COLLETON ing its doors for good next week. search of bargains, like the $4
lawyer — in California and Wash- COUNTY It is one of 326 nationwide the be- shirts and discounted lawn fertil-
ington, D.C. Walterboro leaguered retailer is closing in its izer Louise Dufour, 49, packed up
Wyoming was home to the low- efforts to climb out of the red. to take home to Beaufort earlier
est-paid lawyers, at $57,710 a year. HAMPTON The chain’s Columbia stores this week.
North Dakota and South Dakota COUNTY were spared, but Kmarts in Aiken “I can’t wait to go home and fig-
were the other two states where and Spartanburg are also shutting ure out how much I saved,” she said.
lawyers averaged less than $60,000 down this month. Six other S.C. To others, the Kmart’s closing
a year. stores closed last year in a prior is a non-event.
Enlarged
COMING MONDAY in the Columbia area round of closings. “It doesn’t really matter be-
Business Journal: How it’s easy in BEAUFORT In Walterboro, Kmart’s depar- cause we’ve got Wal-Mart here,”
COUNTY
Columbia to find a lawyer. 95
ture after more than 20 years long-time resident Laurens Hall CHRISTOPHER ALUKA BERRY/SPECIAL TO THE STATE
Beaufort N would seem like a big blow to a Jessica Price and her daughter, Madison, 2, leave the
— Chris Roberts THE STATE town of about 6,000. SEE KMART PAGE F4 Walterboro Kmart after shopping for bargains.
Groucho's restaurants are
Monday popping up all over the Midlands
and as far away as Charleston
and Charlotte. Read how
franchising is allowing the small
C O LU M B I A B U S I N E S S J O U R N A L company to spread its wings.
INVESTING F2 • CALENDAR F4 • ACHIEVEMENTS F4
Page F3 FULL CYAN MAGENTA YELLOW BLACK
WWW.THESTATE.COM THE STATE, COLUMBIA, SOUTH CAROLINA SUNDAY, APRIL 6, 2003 F3
SUNDAY BUSINESS
How HomeGold landed in bankruptcy court
people access to loans. HomeGold’s board, his pay rose while losses have lost the equity in their home.” was to sell its retail mortgage divi-
HOMEGOLD FROM PAGE F1 parent, Emergent, earned a com- REVOLVING mounted. Williams says he thinks two- sion, according to SEC filings. That
bined $21 million in 1996 and 1997, Between January and June third of the loans HomeGold made division — which generated most
million in debt, almost all owed to and its work force grew to more
DOOR 2001, HomeGold lost $17.3 million. during the 18 months he was with of HomeGold’s business — was
its Carolina Investors Inc. subsidiary. than 1,000 employees nationwide. HomeGold has had six On June 6, Sheppard’s base salary the company were “unscrupulous.’’ worth between $135 million and
■þLawsuits that question how the State residents, meanwhile, chief financial officers in rose to $600,000. The company’s Webb, who moved from Lex- $170 million, according to outside
company dealt with its mortgage continued to put millions of dol- three years: board of directors said he deserved ington to California after quitting appraisers hired by the company.
customers. lars into Carolina Investors Inc., it because, among other things, the HomeGold in 2000, said she feels In August 2002, the company
Sept. 29, 2000 — Larry Gos-
Several lawsuits claimed the because it paid a better return than company’s mortgage volume bad about what she did there. said it had a buyer. The deal fell
ness replaces Kevin J. Mast.
company engaged in unfair lending a bank’s certificate of deposit. Car- nearly tripled in 18 months. “There wasn’t one loan that I apart, however.
practices that preyed on poor peo- olina Investors sent the profits Nov. 30, 2000 — Rhonda B. By the end of 2001, HomeGold did where I felt like I really helped Another buyer emerged —
ple. HomeGold has denied accusa- back to HomeGold, which used it Johnson replaces Gosness. lost $73.4 million. anybody,’’ she said. Sheppard.
tions in court documents, but in No- to make more loans. She resigns March 26, 2001. The losses were so deep that El- Similar claims were made He created Emmco, a company
vember it agreed to pay $10 million May 8, 2001 — HomeGold liott Davis, the state’s largest ac- against HomeGold and other that bought most of HomeGold’s
to settle a lawsuit in North Carolina. BAD TIMES ARRIVE president Forrest E. Ferrell counting company and Home- lenders in North Carolina. Home- mortgage business. He paid
Lawsuits are pending in other states. In 1998, the troubles began. takes over until Kevin G. Mar- Gold’s external auditor, waved a Gold agreed in November to set- $135,000 cash down and promised
■þFurther scrutiny at home. Emergent’s stock price plunged 96 tin takes the job. He resigns red flag called “ongoing concern.” tle a series of lawsuits for $10 mil- half of Emmco’s profits, up to $170
The company is the target of percent and the company lost $58 Aug. 29, 2002. Elliott Davis in April 2002 said it lion without admitting that it did million, SEC filings show.
two lawsuits by S.C. residents who million. Aug. 29, 2002 — Karen A. had “substantial doubt” whether anything wrong. At the same time, HomeGold
put millions into Carolina Investors The key problem was falling in- Miller is named chief financial HomeGold could stay alive, ac- Also last year, HomeGold paid gave Sheppard a five-year, $8.4
Inc., the HomeGold subsidiary that terest rates, which cut into earn- officer, a job she still holds. cording to SEC filings. $5,000 to settle 10 complaints that million loan to buy HomeGold’s
was a key source of its capital. ings. Meanwhile, the company’s Company officials disputed El- it called residents on Kentucky’s $3.4 million office in Lexington.
The state attorney general’s of- loan volume dropped 40 percent liott Davis’ findings. After the two “do not call” list for telemarketers. The sale, which closed Dec. 31,
fice said it will look at the business between 1997 and 1998. Gold and a very prosperous future.” quarreled over several issues — in- The company didn’t admit to guilt, didn’t leave much left for Home-
practices of both HomeGold and Emergent fired 28 percent of its It was prosperous — for Shep- cluding HomeGold’s survival said Brian Wright of the Kentucky Gold and the 100-plus workers
Carolina Investors, whose lawyer work force, quit the auto loan busi- pard. chances — Elliott Davis withdrew attorney general’s office, but it who remained.
said it will file for bankruptcy pro- ness and changed its name to In exchange for his company, its services. agreed to pay $25,000 per violation HomeGold kept five retail
tection this week. HomeGold Financial Inc. HomeGold gave Sheppard: from then on. mortgage branches, a small whole-
Most of the key players — in- HomeGold seemed to stabilize ■þ40 percent of HomeGold’s com- LENDING PRACTICES sale loan division, and plans to in-
cluding Sheppard, HomeGold’s in 1999, turning a $1.8 million profit. mon stock. His 6.1 million shares During this time, some of the THE END GAME vest in a payday lending company
current management and Carolina But the company remained in were worth $7.2 million on Feb. 29, company’s business practices were As HomeGold continued to he- called FlexCheck.
Investors Chairman Earle Morris deep financial straits, with loan 2000, the day the merger was com- landing HomeGold in court. morrhage money during 2002, HomeGold also kept Carolina
Jr. — declined interview requests volume falling that year to one-fifth pleted. He also received options to Several former employees in- money kept coming into its Car- Investors.
by The State last week. The story of its 1997 levels. buy another 825,000 shares of stock. terviewed for this story said Home- olina Investors subsidiary. With the On March 24, Carolina In-
of HomeGold’s fall can be told As the profits shrank, Home- ■þThe job of chief executive offi- Gold didn’t keep its customers’ stock market falling and banks of- vestors didn’t open its office in
through the company’s SEC filings, Gold found it harder to pay what cer at an annual pay of $250,000 best interests in mind. They said fering insured deposits at 4 per- Pickens County. A day later, Car-
press releases and interviews with it owed Carolina Investors. plus 2 percent of profits. HomeGold’s practices included: cent or less, Carolina Investors ad- olina Investors chairman Earle
former employees and managers. “If HomeGold’s performance ■þControl of the board of directors. ■þCharging high fees to cus- vertised returns of 8 percent. Morris Jr., a former state comp-
could be improved, it would mean He picked four of seven board tomers. One company official said he troller general, stood outside the
HOW IT STARTED more money would get back to members. “We would try for as much in was worried HomeGold didn’t have office and told several hundred
HomeGold’s beginnings are Carolina Investors,’’ said Jan ■þLoans of $5.7 million. Sheppard origination fees as we could get,’’ the money to pay back investors. people: “Nobody’s lost anything.”
with Emergent Group Inc., a Sirota, a former member of the owed $1.7 million to his company said Shanna Webb, a former loan Chief financial officer Kevin Four business days later,
Greenville company in the trans- company’s board of directors. and wanted to borrow $4 million officer who said she left Home- Martin resigned in late August HomeGold filed for bankruptcy.
portation business. more. To close the deal, HomeGold Gold after 7½ months because of 2002, after a little more than a year At the top of its creditor list is
New management took over CHANGE AT THE TOP lent the money at 7.5 percent — her concerns about the company. on the job. In a letter to board Carolina Investors, which is
and moved into the loan business HomeGold turned to Ronald J. backed by the stock it gave to “We’d throw a big number out members, he said HomeGold’s owned $275 million and said it ex-
in 1991 by purchasing Carolina In- Sheppard, who controlled a Lex- Sheppard. there and see if they’d bite.’’ poor financial condition meant it pects to file for bankruptcy pro-
vestors Inc. ington-based company called ■þA way to pay off the loan. Jim Williams, another former shouldn’t take any more money tection this week. Since the bank-
Started in Pickens County in HomeSense Financial Corp. HomeGold created a new stock cat- HomeGold loan officer, said com- from Carolina Investors. ruptcy, HomeGold and its
1963, Carolina Investors made loans Both companies were in simi- egory for Sheppard. The 11 million pany officials ordered anyone with Martin, who now works for an- subsidiary have been criticized by
using money from bonds and notes lar lines of work but Sheppard’s shares of preferred stock provided less than stellar credit — lower other Columbia-area mortgage com- S.C. lawmakers and are the target
it sold to South Carolina investors. privately held company was doing no voting power, but they guaran- than an “A’’ rating — to be pany, declined to comment further. of two Upstate lawsuits filed by
By 1994 Emergent had sold or well, earning $5.5 million from teed Sheppard $880,000 in annual charged as much as possible. Robert Philpott, who was then angry investors.
closed all its non-financial busi- 1995 to 1999. dividends through 2004, when the “If the customer was a ‘B’ or a board member, called Martin’s Customers of Carolina Investors
nesses. A year later, it opened the HomeGold officials believed the dividends would rise to $1.1 million. lower, they were probably getting letter “a friendly opinion, and it will be unsecured creditors in the
HomeGold loan subsidiary spe- company could recover by teaming John M. Sterling Jr., one of overcharged $3,000-$4,000 on a was taken into consideration.” bankruptcy filings. That gives them
cializing in “non-prime” mortgages with Sheppard, said Sirota, a Florida HomeGold’s founders and a board $100,000 loan,’’ he said. He said HomeGold’s officers “very little leverage in cases like
— home equity loans to people investment banker who helped en- member until last month, said ■þTargeting the less-educated. thought the losses could be turned this,” said Steven Mann, a USC fi-
with marginal credit ratings. The gineer the merger and remained on there was nothing out of the ordi- “We wanted the dumbest cus- around, so it kept using revenues nance professor.
target market was property own- the company’s board until 2001. nary in the 2000 deal that brought tomers we could find,” Webb said. from Carolina Investors. “These folks, at best, will get a
ers who had bad credit and needed “HomeGold was looking for a Sheppard into the company or the She said some people who “We thought there was hope,’’ fraction of their investment back.”
money for credit card debts, col- white knight, and they thought it subsequent sale of HomeGold’s turned to the company for debt said Philpott, who resigned from
lege loans or house repairs. It used was Ronnie Sheppard,’’ he said. core assets to Sheppard in 2002. consolidation loans often ended up the board earlier this year. Contact Dietrich at
telemarketers and direct mailings HomeGold, with $188 million in “I don’t think there was any- worse off than when they started. The company concluded an- kdietrich@thestate.com or at
to find customers. total assets, had plenty of workers thing unusual with either deal,’’ he People looking for a loan to other way to turn the tide of red ink (803) 771-8339.
The company made money by and large credit lines available. said, declining further comment. consolidate a few thousand dollars
charging higher-than-usual inter- HomeSense, with $53 million in as- of debt often were talked into re-
est rates, which people with mar- sets, was selling nearly as many
LOSSES DEEPEN financing their homes, she said.
ginal credit histories must pay. The loans and figured to sell more if it Despite the jump-start, Home- “After we were done with them,
risk is that those borrowers are added HomeGold’s resources.In the Gold lost $30 million in 2000. they had a much higher interest rate
more likely to default. Jan. 31, 2000, press release an- Sheppard was paid $629,541 that on their mortgage and maybe only
HomeGold’s business grew dra- nouncing the merger, Sheppard year — triple what Sterling received a couple hundred dollars in their
matically as federal lending re- said: “Our joint efforts can con- in 1999, when he cut his pay in half. pockets as a result of the refinanc-
strictions were eased, giving more tribute to the rebuilding of Home- With Sheppard running the ing,’’ she said. “And they would
HOMEGOLD AND CAROLINA INVESTORS: KEY EVENTS
1991: Greenville-based Emer- its small-business loan division. Dec. 31, 2000: HomeGold mortgage unit. The company
gent Group Inc. goes into the Dec. 31, 1998: Stock closes closes year with $29.8 million loss doesn’t say Sheppard is the pro-
loan business after buying com- at 50 cents a share, down 96 but says it expects to turn oper- posed buyer.
panies that include Carolina In- percent during the year. ating profit in second half of 2001.
vestors Inc., a small mortgage Dec. 31, 2002: Sheppard’s
Jan. 31, 2000: HomeGold says Dec. 31, 2001: HomeGold company completes purchase.
company opened in 1963. closes year with $73.6 million
it will buy HomseSense Finan- He quits HomeGold’s board.
1995: The company made cial Corp., a privately held com- loss.
$250 million in loans, quadru- Feb. 25: Three months after say-
pany based in Lexington owned April 2002: Accounting firm El-
pling its business in three years. mostly by Ronald J. Sheppard. liott Davis says it’s not sure ing it would “vigorously contest”
March 1996: Its stock hits all- HomeGold can remain a “going a North Carolina class-action law-
February 2000: Nasdaq drops suit that claimed it and other lend-
time high of $20 a share. HomeGold stock to over-the- concern.” HomeGold hires an-
other external auditor after Elliott ing companies used unfair tactics,
January 1998: Earle M. Morris counter status, saying the deal
“declines to stand as auditors.” HomeGold agrees to pay $10 mil-
retires as state comptroller, created a “change of control” in
named Carolina Investors chair- the company. May 2002: HomeGold says it’s lion to settle the suit.
man. May 9, 2000: With merger considering a sale of its retail March 31: HomeGold Financial
Summer 1998: Emergent complete, HomeGold moves to mortgage unit, which provides and its main subsidiary seek
changes its name to HomeGold Lexington and quits the whole- the bulk of its revenue. bankruptcy protection, saying it
Financial Inc. and lays off hun- sale lending business to focus Sept. 3, 2002: HomeGold can’t make payments to its Car-
dreds of workers when it sells on home mortgages. says it has a bid for its retail olina Investors Inc. subsidiary.
Recovering money INVESTORS in hopes they still have value.
“All we’ve got is a piece of pa-
per,” she said.
expected to be tough FROM PAGE F1
dal-ridden Houston firm. They place
much of the fault on HomeGold, a
Whitlock has stacks of Carolina
Investors certificates. More than
35 years ago, she started making
By KEN KNELLY what the outcome will be. Only Columbia-based mortgage firm that investments with a few hundred
Staff Writer God knows. We’re going to take bought Carolina Investors in 1991. dollars. Her investments grew with
every step.” W.T. Garren, time and interest.
Those trying to help Carolina HomeGold continues to collect a lifelong Pick- Whitlock said a top executive
Investors’ account holders get their money from borrowers, Gaddy ens County resi- at Carolina Investors called her last
money back have their work cut said, so there is a flow of funds. dent, said the sit- weekend to tell her some of the
out for them. How much will become clear as uation is worse certificates would be honored. The
The Pickens County company the court and bankruptcy cases than Enron be- executive also told her account
is owed an estimated $275 million move forward. cause the impact holders soon would receive a let-
by its parent, HomeGold Financial Meanwhile, authorities are in- is concentrated ter of explanation, she said.
of Columbia, which is seeking fed- vestigating the Carolina Investors so heavily in one “Nothing, nothing,” Whitlock
eral bankruptcy protection. transactions along with parent area. The county, said as she checked her mail Fri-
Garren
Carolina Investors is expected HomeGold. Compliance with civil with its mix of in- day. “He told me I’d get something
to follow suit this week, an attor- securities statutes and criminal dustrial plants by the middle of the week.”
ney for the company said. codes may be under review. and farms, has 110,000 residents. Officials with Carolina In-
While the company’s creditors Officials declined to outline Garren, 74, invested almost vestors could not be reached for
line up for payment, more than specifics. $50,000, his entire life savings, in comment.
8,000 investors worry their money “Nothing is ruled out,” said Carolina Investors. A retired tex- Whitlock was planning to use
is lost. Most live in the Upstate Trey Walker, a spokesman for the tile worker who lives in Easley, the interest from the investments
where Carolina Investors is based. S.C. attorney general’s office. Garren was going to use the to pay for her care if she needed
Sue Gaddy, a Greenville attor- The accounts were marketed to money if he needed to move to a to move to a retirement home.
ney, has filed one of two lawsuits South Carolina residents, as Car- retirement home. Whitlock said she has other in-
against the companies on behalf olina Investors was regulated un- “I don’t know what I’m going vestments. Some retirees were
of investors. It seeks class-action der state securities laws rather to do,” Garren said. “If I could get counting on Carolina Investors as
status, the return of funds plus than federal ones. half of my money back, I would be their only source of retirement in-
other damages. Companies can choose state tickled to death.” come, she said.
Will investors get back every regulation under certain circum- Delores Donehue, a 72-year-old Carolina Investors should pay off
penny? stances. Advantages can include Greenville retiree, is skeptical those account holders first, she said.
“That’s very doubtful,” said fewer filings and less stringent she’ll get back much of her money. “Leave me last,” Whitlock said.
Gaddy, who invested $10,000 with oversight. Donehue, also a former textile “I want my money but I would wait
the company. worker, invested about $42,000. to be last.”
“I would not be undertaking Contact Knelly at Donehue and others are holding
this case if I didn’t have confidence kknelly@thestate.com on to the eagle-emblazoned certifi- Reach Collier at (803) 771-
(in some return). No one knows or at (803) 771-8427. cates issued by Carolina Investors 8307 or jcollier@thestate.com.
01079
