HA – Pickering investigating $860K stock purchase by USM

The decision of a University of Southern Mississippi Research Foundation-owned company to purchase $860,000 of another company’s stock in 2008 was hardly ordinary, Southern Miss officials said Tuesday.

“It is not usual and had not been done before,” said Southern Miss spokeswoman Jana Bryant.

That company – Pinion Properties LLC, formed by the foundation to manage the old Garden Park Hospital in Gulfport – ended up losing more than $800,000 in the transaction.

Now Pinion Properties wants its money back. And state Auditor Stacey Pickering is investigating the transaction.

A complaint, brought by Pinion Properties April 22 in Forrest County Chancery Court, alleges that the company’s managing agent, Dr. Richard Hadden, a former Southern Miss employee, purchased $860,000 in stock (245,500 shares) from a company called Saone Corp – owned by him and his wife Helene in May 2008.

That purchase violated the Mississippi Limited Liability Company Act, the complaint alleges, and that “there was no authority to purchase Saone stock.”

Former Provost Jay Grimes, serving as Pinion chairman of the board at the time, signed a subscription agreement for Pinion to purchase the stock. The purchase occurred just three days after the Haddens formed Saone.

Grimes said he had not seen the litigation and could not comment.

Hattiesburg American
4/28/10