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Court documents show Kerrville mayoral candidate has a long history of not paying people back

L. Brent Bates says his experience qualifies him to be mayor, but his business history is strewn with liens, judgments and lawsuits over his practices.

They were a couple, so good-natured that those who knew them said they could be struck by lightning and not have anything bad to say about it.

Stan Cobbs was known to many in Kerrville — a good Presbyterian who oversaw the church-affiliated Mo-Ranch camp development in the 1980s. His wife, Carolynn, was equally cherished for her commitment to education — having taught school for 33 years.

However, in the twilight of their lives, they quietly fought a lengthy legal battle against Brent Bates, a real estate developer and investor who promised to return nearly $300,000 of the hard-earned money they loaned him. When they finally got Brent Bates to sign an agreement to pay them back on Nov. 11, 2019, their lives were nearing an end.

Stanley and Carolyn Cobbs loaned Brent Bates nearly $300,000 and were never repaid.

This is a 2019 agreement where Bates said he would pay the Cobbs back.

This is the judgment against Bates on behalf of the Cobbs.

In January 2020, Carolynn Cobb died in hospice care at a San Antonio assisted living home, where she was living her remaining days with Stan — her husband of 64 years. In June, Stanley died. They had three children, including Stephen Smith-Cobbs, a Presbyterian minister in Virginia, who was left to manage the family's trust.

Bates agreed that he would make payments starting in February 2020 and then make a final payment in August 2020. He never made those payments. Smith-Cobbs went to court and won a $330,000 judgment against the developer and now Kerrville mayoral candidate in December 2021. According to the Cobbs family lawyer, the money still hasn't been repaid.

Richard Mosty, the Cobbs' attorney, said the couple made a series of loans from their individual retirement accounts to self-directed IRAs that allowed the money to be loaned to Bates. Mosty said the couple's children didn't realize the extent of the loans until toward the end of their parents' lives.

"To this day, (Bates) has not made one payment," Mosty said.

This isn't the only time that Bates has been sued and lost a significant judgment for failing to pay back or keep the promises he made about his business endeavors.

Bates will tell you that he's the best qualified to be Kerrville's mayor because of his business and financial acumen. He touts achievements such as starting the Guadalupe River Trail or finishing the pavilion overlooking the river on Water Street and his commitment to his church in Fredericksburg, where his father was once a pastor.

"I have a history of motivating people," Bates said. "I have a history of getting things done."

Bates has constructed several projects that mark parts of Kerrville, including the River Guide Village and another commercial center on Water Street. His style is Hill Country aesthetic with sandstone facings and metal roofs. Bates said he'd worked his way through many facets of financial advising, development, mediation and now cryptocurrency. He's an enthusiastic crypto backer, running a YouTube show with more than 5,000 subscribers.

Throughout his campaign to become Kerrville's next Mayor, Bates has positioned himself as a can-do business leader fighting against the city's practices. He is engaged in a federal lawsuit against the city, alleging the city violated his constitutional rights to build a three-story office building. With a big cowboy hat, wide smile and booming voice, Bates says his experience will help guide Kerrville into the future.

"I think what makes me the better candidate is my overall experience," Bates said. "I started as a stockbroker when I was 24. I'm a certified financial planner. I'm a registered investment advisor."

But a deeper dive into Bates' legal history tells a different story about his business dealings.

The depth of Bates' varied business interests is in some 60 limited liability corporations he's formed or managed, according to the Texas Secretary of State Office records. Of those companies, about 20 have been declared forfeited existence. Here's how the secretary of state explains forfeited existence: "An inactive status indicating that the corporation or limited liability company failed to file its franchise tax return or to pay the tax due thereunder. Status is changed by the secretary of state when certification of the delinquency is received from the comptroller of public accounts."

Records from the Texas Secretary of State's office show some of Bates' companies.

Bates's history is in publicly available court documents from the 198th and 216th district courts and others. Just some of the legal proceedings against Bates include:

  • March 29, 2011 — Bates settles a small claims cases filed by a Bandera glass company that said he hadn't paid them.
  • April 8, 2011 — 166th District Court in Bexar County issues a $35,043 judgment against Bates on behalf of Hill Country Electric Supply, L.P.
  • Dec. 22, 2011 — Bates settles with American Express Bank, FSB to repay $15,553.
  • May 18, 2012 — The Texas Workforce Commission issues a $5,440 assessment against Bates for failing to make correct withholdings.
  • Oct. 12, 2012 — 216th District Court issues a $280,858 judgment against Bates on behalf of Kerrville couple Dorsey and Charlene Spaulding.
  • Oct. 12, 2012 — 216th District Court issues a $34,100 judgment against Bates on behalf of Kerrville couple Dorsey and Charlene Spaulding.
  • Aug. 14, 2013 — Comerica Bank earns a settlement for more than $20,000 after a property owned by Bates was auctioned off below the amount owed to the bank.
  • March 11, 2014 — A years-long battle between Bates and Dr. David Jones, who worked to build cancer centers, ends with a joint dismissal of their legal action. The acrimonious case featured suits, countersuits and accusations of impropriety.
  • May 19, 2014 — The Internal Revenue Service places a lien against Bates for more than $145,000 in unpaid taxes on trust funds managed by Bates. Here's how the IRS describes the law: "Section 6672 of the Internal Revenue Code imposes personal liability in the amount of the unpaid trust fund taxes upon any person who is required to collect, account for, and pay over such taxes and who willfully fails to do so."
  • May 19, 2014 — The Internal Revenue Services places a lien against Bates for more than $16,000 in unpaid personal income taxes from 2009, 2011 and 2012.
  • Dec. 14, 2021 — 198th District Court issues a $330,000 judgment against Bates on behalf of the estate of a deceased couple.

To hear Bates explain it, not paying the Cobbs back was accidental. In his tax liens, including to the city of Kerrville and the Kerrville Independent School District, it's the fault of those agencies for not filing correctly. In the case of Kerrville's Dorsey and Charlene Spaulding, it was the city of Kerrville's fault for delaying his Palacios de Guadalupe condominium complex leading to financial troubles that meant he couldn't get them moved into their condo. Bates repeatedly blames Kerrville's development services for his problems.

In court documents, the Spauldings didn't blame the city — they blamed Bates. The Spauldings' lawyer, Richard Mosty, who also represented the Cobbs, accused Bates of committing real estate fraud. The fight with the Spauldings lasted more than five years and wound its way through arbitration that found Bates personally liable.

The judgment against Bates on behalf of the Spauldings.

Bates said the Spauldings were trying to ruin him, alleging their motivation was personal rather than financial.

When the Cobbs sued Bates, they too wanted Bates held personally liable, not one of his many limited liability corporations.

"As to the Cobbs, he knows exactly how to reach the heirs through me and can deliver the money to me in exchange for a release of the judgment," Richard Mosty said in an email. "During the course of the litigation, he reached out directly to Stephen Smith Cobbs and I told (Bates' lawyer and brother) to direct any communications to me as their lawyer. He got the Cobbs into an investment in his companies that did not pan out, and to settle that, he signed a note to the Cobbs and never made any payments at all to this day."

Smith-Cobbs filed suit in November of 2021, seeking enforcement of the agreement between Bates and his parents. One month later, 198th District Court Judge Melvin "Rex" Emmerson ruled that Bates had to repay the estate and cover lawyers' fees, and if he lost appeals, the interest and fines would grow larger.

Bates said Mosty is running a "cottage industry" in an attempt to ruin Bates financially. Bates said he lost more than $2 million from the Guadalupe de Palacios Condos, which had units auctioned off on the courthouse steps by then Kerr County Sheriff Rusty Hierholzer.

"Mosty Law represents clients who say they have a problem with Brent Bates," Mosty said.

In the case of his Water Street development, Bates vehemently opposes a city requirement that he place sprinklers in the 21,000-square foot three-story building that overlooks the Guadalupe River. The city argues that Bates' building doesn't meet a variety of codes when it comes to occupancy and fire safety.

Kerrville won a round in Municipal Court against Bates on April 18 when a six-person jury found him guilty of violating city codes at the office complex — ignoring a stop-work order and operating without an electrical license. The city has also asked the federal judge to dismiss Bates' suit, which reaches court in April 2023.

Bates' answer? He's made it clear he thinks the city's planning department should be eliminated, along with zoning. Bates has appealed the ruling of a $1,500 fine.

"We needed to get somebody new," Bates told a crowd at Schreiner University during a candidate forum sponsored by the Kerrville Area Chamber of Commerce. "They say insanity is hiring the same people to do something and expecting it to change. That's kind of what is going on here in Kerrville."

Regardless of the mayoral race outcome, Bates' battles with the city are far from over. As for the Cobbs family, their struggle with Bates to collect their money is still unfolding.


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