Family fights for control of Tri-State Brick & Tile

Trustmark National Bank’s early July foreclosure of Tri State Brick & Tile left the founder’s splintered family little to fight over, but the Mississippi Supreme Court may still have to declare a symbolic winner in the years-long feud.

The justices have been asked to decide whether Trustmark, as the major lender to the 66-year-old Forest Avenue brickyard, should have had the option of vetoing a July 2011 settlement everyone thought brought an end to the fight over control of the company.

The court may ask why bother with what appears to be a moot issue?

Neither side in the dispute, after all, seems to have much to gain since the demise of the multi-million dollar company

That wasn’t the case in July 2011 when the heirs of Tri-State Brick & Tile co-founder Robert H. Robinson went before a Hinds County Circuit Court jury, with one side of the family alleging the other side had jeopardized the company’s survival through theft of corporate assets, fraud and breach of fiduciary duties.

By the fourth day, the jury had heard the children of Robinson’s daughter, Martha Robinson Henne, claim that the founder’s son, Robert D. Robinson, and later his widow, Jerry Robinson, used Tri-State to support a luxury lifestyle that included a yacht with a full-time captain, a horse farm and an American Express tab nearing $150,000.

Disputed as well was a yearly salary of $300,000 Jerry Robinson began receiving after naming herself CEO upon the April 2006 death of her husband, though she lowered her pay to $150,000 annually by late 2007 after the Hennes began threatening to sue.

At trial, Martha Robinson Henne’s children said they feared that soon nothing would be left of Tri-State, which had been in the family since its founding in 1946.

Then the trial came to a sudden stop. The Hennes and Jerry Robinson had agreed to settle — or so it seemed.

News of the settlement delighted presiding Judge Tomie Green. “I think you all did yourselves a great service,” she said. “I think that you’ll probably in the long run be richer. And I don’t mean that in terms of dollars and cents, but because you’ll have resolved your issues yourselves and not allowed people who don’t have the same concerns or love for the company that” Robert H. Robinson “developed so many years ago.”

The Hennes would take control of the company and its finances, according to a term sheet signed by the Hennes and Jerry Robinson. The settlement would undo an arrangement by which company founder Robert H. Robinson left common shares of the company to son Robert and preferred shares to daughter Martha.

The Hennes — Robert Henne, Hilda Henne Abbott, Linda Henne and Jodie Henne — believed the settlement would end a legal struggle that began in spring 2007 when, as preferred shareholders of Tri-State Brick & Tile, they began asking to see the company books. What the Hennes saw when they finally got to review the books months later led them to file suit in 2008, they say.

But with the mid-July 2011 settlement of the suit, the Hennes would become common shareholders and control 51 percent of the company. A turnaround was not assured, however. The building bust by then had caused Tri-State’s brick and tile sales to drop sharply from their peak of around $19 million in 2006.

The Hennes also looked forward to the $150,000 in dividends each was to receive yearly as owners of common shares. Jerry Robinson would receive $150,000 annually as well, according to the settlement terms.

 

Nothing settled

 

Neither the control of the company nor the dividend checks ever materialized for the Hennes.

The snag occurred when Jerry Robinson decided the settlement could not be valid without the blessing of Trustmark, which had liens of more than $10 million on Tri-State Brick & Tile.

By September 2011, the case landed back in Judge Green’s court. Adhering to provisions of the settlement term sheet for resolving any disputes that arose, Green sent the issue to a mediator. The mediators upheld the settlement.

“What resulted from the meeting of the minds must be enforced,” ruled mediator Robert L. Gibbs on Nov. 2, 2011.

He rejected Jerry Robinson’s claim that she could nullify the settlement through a paragraph in the term sheet that specified “the parties contemplate a more detailed agreement consistent with the these terms.”

Robinson had insisted that the more detailed agreement she wanted would include language that any settlement must have Trustmark’s consent.

Meanwhile, Trustmark wants no part of the family feud, at least publicly. Bank spokeswoman Melanie Morgan says Trustmark is not a party to the litigation and has no reason to comment.

Trustmark might not be party to the litigation but it is nonetheless the central figure in a question Jerry Robinson insists the Mississippi Supreme Court should answer: Must a principal lien holder to a business give consent for any financial settlement involving the business to be legal?

Charles Griffin, attorney for Jerry Robinson was to submit briefs this week arguing for Trustmark’s participation in the settlement.

“The briefs we plan to file will contain our arguments and the reasons we believe we should prevail before the Mississippi Supreme Court,” Griffin said in an email.

One point upon which lawyers for both the Hennes and Jerry Robinson agree: The parties believed the settlement represented the best way to avoid a takeover of the company by Trustmark.

But while the family wrangled over whether they had a valid settlement, Trustmark took ownership of Tri-State at an auction on the steps of the Hinds County Courthouse July 10.

>>Read more about Tri-State collapse

>Everyone thought things were running smoothly for Tri-State

>Trustmark feels pain of $10 million in bad debt after Tri-State Brick’s demise

>Assessing Tri-State’s future (or lack of one)

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