BARTLESVILLE — Legal proceedings forced by a recent Osage County lawsuit are expected to have an impact on settlements being reached in the Bartlesville-area investment case involving Larry Joe Dearman, the former senior advisor of The Focus Group.
Negotiations continued in Washington County District Court last week between attorneys representing more than 30 Focus Group clients, most who already have obtained judgments in the case. The plaintiff investors have claimed combined losses of more than $2 million from allegedly fraudulent loans and investments arranged by Dearman.
A 40-year-old former church music minister, Dearman was a resident of rural Wynona before moving to Bartlesville in the late 1990s. Dearman has been living in Tulsa since last fall after he parted ways with The Focus Group, an investment consulting firm which he had helped to found.
Around the time of Dearman’s departure, the company began mailing out notices to some of its investor/clients who Focus Group officials said might have been affected by what it referred to as “inappropriate private financial transactions” involving one of its agents.
The bulk of the Dearman deals that have come under scrutiny in the Focus case are connected to companies with ties to Bartlesville businesswoman Marya Gray.
In late April, the court allowed Gray to sell two businesses — Bartnet Wireless and Quench Buds — for a combined amount of approximately $1 million. Funds from the sale were set aside by the state court for disbursement to plaintiff investors.
Last Thursday, Washington County Associate District Judge Russell Vaclaw asked the plaintiff’s attorneys to submit an “agreed order” regarding the distribution of approximately $200,000 in net assets that resulted from the sale of Quench Buds, a food-and-drink dispensing service.
Discussions also were held in regard to a pending bankruptcy declaration by Bartnet, a wireless internet-provider business designated as the recipient for many of the loans cited in the Focus/Dearman civil actions. The Bartnet bankruptcy was filed last Tuesday, Tulsa court records show.
More than $340,000 in net assets that were generated through the sale of Bartnet will be tied up indefinitely due to the federal bankruptcy matter, according to attorneys. The chapter 7 business bankruptcy was forced by a lawsuit filed May 2 in Osage County, lawyers said.
In the meantime, however, Gray was allowed by the court to sell Bartnet to Ochelata-based Totah Communications. According to owner Mark Gailey, the company is being renamed and reincorporated as BartNet IP, LLC.
“BartNet IP, LLC is going strong. We don’t plan to close the doors,” said Gailey. “We aren’t being forced into bankruptcy. The parent company, Totah Communications, Inc has been in business since 1954. We purchased the assets of Bartnet Wireless.”
Gailey said that in the purchase agreement, the name is to be changed. He stressed that Bartnet customers will continue receiving service.
“We are upgrading the service to provide more reliability,” he said.
The suit states that Howell’s Well Service made at least $500,000 in loans to the former Bartnet and Dearman between 2007 and 2012. It claims that another $244,000 was withdrawn from a Focus Group investment account maintained by the Hominy oilfield company. The suit is one of two Focus/Dearman legal actions to be taken in Osage County.
Since last November, a total of 14 Focus investor lawsuits have been filed in Washington County. A dozen of them were consolidated in April under the case being handled by Vaclaw. Distribution of the Quench Buds assets were to take into account the two remaining local actions.
Totah Communications was discharged as an interpleader party in the suit last Thursday. Vaclaw also ruled that Totah be awarded its attorney fees from the Quench Buds’ account.