Testimony from Donald DePriest dominated the third day of the trial brought against the Columbus businessman by former associate Oliver Phillips, who is suing DePriest for nearly $10 million.
DePriest is countersuing Phillips — a former senior partner of T.E. Lott and DePriest”s accountant for nearly 30 years — contending the case against him is not valid.
The entire day was dedicated to both DePriest”s direct questioning and cross examination.
During the long and grueling testimony, DePriest said Phillips was never a partner in the business which would become Charisma Communications Corporation. He also said the only reason he signed over 70 units of MCT Investor L.P. — a venture capital company DePriest owned — was to help Phillips build credit, and never intended for the accountant to keep the ownership.
Much of the testimony surrounded a few weeks in spring 1996 following the heels of a successful lawsuit filed by DePriest. DePriest had successfully sued McCaw Communications for violating a deal the company had made when they purchased Charisma Communications from DePriest in 1996.
DePriest said after Phillips heard about the lawsuit, he stormed into DePriest”s office and demanded money.
“He came into my office and in a loud and unusual voice said, ”Where”s my settlement?” I didn”t think he was serious at first, but he was very serious,” said DePriest. “He demanded $10 million.”
Phillips has maintained his claim for the money comes from a 1984 agreement signed by DePriest in which 10 percent of anything DePriest gained from Charisma would be transferred to him. Phillips worked closely with DePriest in 1982 to secure markets in the then-infant cellular communications industry.
DePriest has said from the start the document in question is vague and unfamiliar. He admits his signature is on it, but claims he had no knowledge of it until 1996 when he was confronted with it by Phillips.
“If this thing was ever in force, it is not in force now,” said DePriest.
In 1990 DePriest had also signed over the 70 units of MCT LP, which, according to DePriest, were handed over for Phillips to use as collateral on any loans he might wish to obtain.
After the stormy confrontation between DePriest and Phillips, DePriest sent Phillips a hand-written letter which offered Phillips $7 million for the MCT LP units upon the condition their financial relationship would be terminated forever.
Phillips rejected the offer, and on April 15, 1996, another meeting was held at DePriest”s office. This time, according to his testimony, DePriest offered Phillips a check for $5 million. DePriest had earlier requested a personal financial record from Phillips, because as his accountant Phillips knew DePriest”s financial history intimately and DePriest knew nothing about Phillips”.
DePriest testified that Phillips complied and gave DePriest a handwritten document outlining his then-current financial situation. DePriest said the document proved Phillips was not only financially insolvent, but it also had no mention of the MCT LP units nor his claim DePriest was indebted to him in connection with Charsima.
Furthermore, in 1986, DePriest said he gave Phillips a check for $ 1 million for the work he did on the Charisma licensing project. When the check was handed over to him, DePriest said Phillips made no mention of the 1984 agreement or any other money DePriest was supposed to owe him.
Part of DePriest”s counterclaim states he believes Phillips should have to pay him back the $1 million he gave him more than 20 years ago.
DePriest seemed to blame Phillips” anger and claim to additional money on simple envy.
“He was there in my office, and I don”t want to sound dramatic, but it was as if he was saying, ”Here you”re worth hundreds of millions of dollars and I”ve done all this work for you over the years and I”m only worth a few ten thousand,” said DePriest.
Phillips said DePriest actually offered him the full $10 million — $5 million at the time of the April 15 meeting and another $5 million due on Dec. 31, 1996 — in exchange for which, Phillips agreed to sign a release of financial debt owed to him by DePriest.
The plantiffs” attorneys produced a promissory note, which was dated April 15, from DePriest to Phillips for $5 million.
DePriest maintained the check he wrote on the same day as the promissory note — which he did not remember drafting — was the very note the check was supposed to honor.
Phillips attorneys confronted DePriest with both the note and the original certificates of ownership for the units of MCT LP which Phillips maintains were the collateral given to him by DePriest. DePriest said he didn”t know how Phillips got the certificates, but he said he didn”t think it mattered.
“It didn”t matter to me he had it, I thought it had been released when he signed the release,” he said.
The trial, which is being presided over by Lowndes County Chancery Judge Kenneth Burns is expected to continue until the end of the week. DePriest, who has operated several business both in Columbus and in the rest of the country, was formerly a member of the Tennessee Valley Authority Board of Directors until it was revealed the Internal Revenue Service had placed a lien against him for owing $1.1 million in taxes.
He is also being sued for several millions by others who claim they are also owed money by DePriest.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.