By Patsy R. Brumfield/NEMS Daily Journal
OXFORD – An Oxford-based venture capital business faces a nearly $19 million debt to the Small Business Administration, and at least one of its sister companies is in receivership over similar problems, federal court records show.
This week in U.S. District Court, the government seeks recovery of $18,960,853 from CapSource Fund L.P., doing business at 1510 Jefferson Ave.
SBA loaned CapSource Fund the money in September 2008 and says it hasn’t been fully paid since the note matured June 30.
The six-page complaint asks the court to take jurisdiction over the company and appoint SBA as its permanent receiver to liquidate assets and satisfy the claims of its creditors.
Secretary of State Office documents show CapSource’s recorded general partner as CapSource Partners L.P.
Under the U.S. Small Business Act, SBA licenses what it terms Small Business Investment Companies and provides loans to help them grow.
All the CapSource companies – four limited partnerships and two incorporations – appear to have Mississippi roots in the Jackson area but moved to Oxford by August 2011.
Already in receivership is CapSource 2000 Fund L.P., which SBA went after in court last March over a similar situation amounting to $9 million in outstanding loan payments.
CapSource 2000’s general partner is listed as CapSource 2000 Partners L.P. with the same address in Oxford.
They appear to be part of a series of “CapSource” companies with duplicate officers, including James R. Herndon of Oxford and Bobby F. Weatherly Jr. of Houston, Texas.
In information provided to BusinessWeek, Weatherly is described as a CPA earning a master’s from the University of Mississippi in 1967 and chief financial officer for Callon Petroleum Co.
Herndon shows on his LinkedIn page that he is owner/general partner at CapSource Services Inc./CapSource Funds and got his law degree from South Texas College of Law after studying at Ole Miss.
His information also states that Services/Funds has more than $50 million under management.
Both men are listed among the officers of CapSource Managers Inc., with Herndon its current president.
Many of the CapSource companies list CapSource Managers Inc. as the registered agent and officers/directors.
Neither Herndon nor Weatherly responded to Daily Journal phone calls about the situation.
Late Thursday, it wasn’t clear who the CapSource companies’ investors are and how or if these loan forfeitures affect them.