Texas tycoon died without valid will, leaving his family, creditors at odds
SAN ANTONIO — Real estate tycoon and cowboy extraordinaire James F. Cotter died as he lived, sowing confusion among the people he loved.
Since his death from cardiac arrest Jan. 25, 2017, his estate has been the subject of much dispute and legal maneuvering among his surviving widow, five children, his lenders, creditors and the IRS.
Cotter died at 83 without a valid will. The bulk of his estate, valued at about $288 million 13 months before his death, comprises a vast real estate empire of 66 properties in six states. In San Antonio, it includes the twin Alamo Towers along Northeast Loop 410 and the two Petroleum Towers just around the corner on Tesoro Drive.
After Cotter’s death, Bexar County Probate Judge Tom Rickhoff appointed San Antonio attorney Marcus Rogers as the independent administrator
to oversee the estate.
Rogers called it “the case of a lifetime” but would not discuss it further, saying he considered it a family matter.
The probate case is further complicated by the fact that the Cotter companies’ books were left in disarray, Rogers noted in a March court filing.
The balance sheets reflect “substantial inter company related accounts that did not balance and had not been reconciled for what appears to be many years,” he said.
As a result, Rogers added, “balance sheets cannot be relied upon to represent the true book value of the assets, liabilities and equity accounts.”
The loans on the real estate were personally guaranteed by Cotter, so his death “resulted in an event of default on virtually every mortgage,” one court document reads.
The companies that own Petroleum Towers, Alamo Towers and the 36-story Cotter Ranch Tower office building in Oklahoma City, considered the Cotter portfolio’s crown jewel, were put into bankruptcy after his death. The latter two bankruptcies were filed to stop lenders from foreclosing on the properties.
Other Cotter entities narrowly skirted bankruptcy themselves, a lawyer for the companies recently said in U.S. Bankruptcy Court in San Antonio. Many of Cotter’s properties have been put up for sale.
“This is a good example of how you don’t want to exit,” attorney Randall Pulman said. Pulman, managing partner of Pulman, Cappuccio, Pullen, Benson & Jones in San Antonio, represented Cotter in a dispute with a janitorial company that sued Cotter and some of his companies for unpaid cleaning services.
Cotter was born “from humble beginnings” in Boise, Idaho, one of his obituaries reads.
Cotter served in the 82nd Airborne Division during the Korean War and attended Walla Walla College in Washington state after leaving the Army. Before graduating, he made his foray into the real estate business by developing a 36-lot subdivision, he told the San Antonio Express-News in 2007.
Cotter was “a self-made man and had very strong religious and Christian principles,” San Antonio attorney Richard Jenkins, who had represented the real estate magnate, said in an affidavit in the probate case last year.
BJ Corp., a cleaning company that sued Cotter and his companies to collect on allegedly unpaid bills, had a different take.
“The Cotter defendants have a reputation for failing to pay their debts when due in an effort to cheat small businesses and to gain an advantage,” BJ Corp. said in its lawsuit.
Cotter was a colorful character, often clad in a cowboy hat and boots, and even required his building security staff to wear similar western attire, The Oklahoman newspaper reported. He bought what’s now known as the 36-story Cotter Ranch Tower, his prized office tower in downtown Oklahoma City, in the 2000s. A bronze statue in front of the building depicts Cotter astride a horse.
“He always had a story, sort of like a mix between visiting with Forrest Gump and the Marlboro man,” Pulman said. “He had a story about all sorts of significant events in history and how he was a bystander.”
Cotter is survived by his third wife, Bettye “Ruth” Cotter, two daughters and three sons. Cotter’s marriage to his first wife, Loretta, produced three children: Vivian Mueller, 61; James Val Lee Cotter, 59; and Valeri Zaharie Glauser, 53. The couple divorced in 1981 after 26 years of marriage.
Four years later, the then-53year-old Cotter married a woman more than half his age. The union lasted less than three years but produced his two youngest sons, James Adam Cotter, 31, and James Andrew Cotter, 29.
Why he gave each of his three sons the same first name is somewhat of a mystery.
“He wondered about that himself,” said Ruth Cotter, 81, his longtime companion who he married in 2012.
For all of his accomplishments in life, Cotter apparently wasn’t very organized. In dying without a will, or at least one that was declared valid, his final wishes for his vast real estate portfolio are unknown.
Even the value of his estate is in dispute.
Cotter’s assets were valued at $287.9 million 13 months before his death, with his real estate holdings representing all but about $41 million as of Dec. 31, 2015, according to a statement submitted in the probate case. His liabilities were listed at $181.7 million.
Yet in April 2017, while the probate estate was being contested, Rickhoff wrote a letter to estate administrator Rogers and other attorneys in the case letting them know that he had been informed by another judge who had briefly filled in for him that the “value of this estate is somewhat speculative in nature.”
Rogers valued Cotter’s assets at $54 million in a May 1 court filing. But that doesn’t take into account what’s owed to lenders and other creditors. It also doesn’t include properties outside Texas that are being worked out in other states. A court filing from last year valued those assets at $69 million.
Sorting things out has been time-consuming. Ryan Reed, Pulman’s law partner and attorney for Cotter’s two youngest sons, speculated that all the heirs are “slightly unhappy” about how the probate case has been proceeding. The IRS is owed up to $30 million in estate taxes, Reed added.
Rogers is “selling properties, but there’s no money coming to me,” Ruth Cotter complained in a recent phone interview. She was receiving a monthly $25,000 “family allowance” from the estate until April. In court papers seeking to continue the payments, she accused Rogers of “engaging in financial dealings” with the estate’s other beneficiaries. Rogers denied the allegations in a brief response filed with the court.
“He was strong-willed and he worked hard,” Ruth Cotter said of her late husband. “And I’d hate to see all of that hard work just go away.”