In April 2004, the University of Texas McCombs School of Business cited Greg Feste's "impressive track record as an entrepreneur" in promoting his "VIP lecture series" talk at the school.
At the time, Feste was chief executive and founder of the Austin Wranglers team, which was then playing its first season in the Arena Football League. He told the American-Statesman that he also ran companies in a range of industries, including real estate, mortgages and money management, private equity and aviation.
Since then, Feste has suffered one sack after another. The Wranglers, dead last in the AFL last season, are moving to a lower quality league. Feste's holding company faces a federal court judgment for unpaid bills, and his latest venture, a restaurant chain, has filed for bankruptcy protection.
In retrospect, the people who invested in Feste's ventures ¡ª including an ex-Dell Inc. executive and professional athletes ¡ª should have done more due diligence. Long before he set up in Austin, Feste left a trail of debts and unsuccessful businesses ¡ª including his first foray into pro sports.
Feste, 47, couldn't be reached for comment. His listed home telephone number and his business numbers are not in service. The FesteCapital Foundation, which says it supports Christian ministries, lists the telephone number of Tejas Securities Inc., a local brokerage and investment banking firm. Feste was part of a group that sold a building in West Lake Hills to Tejas in 2005; Tejas CEO John Gorman says he has never met Feste and doesn't know why Feste listed Tejas' number. Messages for Feste left at his brother's money-management firm in Austin were not returned.
Feste brought the Wranglers to Austin with the promise of a big payoff to investors.
"Buy it for 12 million, sell it for 40 million," he told an American-Statesman reporter in early 2004. At the time, the AFL had a national television contract and celebrity owners, such as Jon Bon Jovi and John Elway, who were raising the profile of the league. Feste spent heavily to promote the team and his other businesses, something his investors noticed. "He certainly gave the illusion of having more money than he had," said Jim Schneider, a former Dell Inc. chief financial officer who invested in the Wranglers and in a Whataburger franchising business Feste organized.
Using a private jet leased from NetJets Aviation Inc., Feste flew friends, family and potential investors to Wranglers games, jetted to Colorado for vacation and flew to Florida to look after other business interests. Among his passengers in 2004: Gov. Rick Perry, his wife and daughter, and U.S. Sen. John Cornyn and his wife, whom Feste shuttled to Washington on separate trips Both men are friends, Feste testified in a deposition this year. He also contributed to both candidates' campaigns in 2003 and 2004. Asked by NetJets' lawyer why he flew Cornyn and his wife to Washington, Feste said, "You know, the company did business with certain folks, and sometime it's just an act of good will to ¡ª to help out."
Cornyn's office said the senator met Feste through a college friend but hasn't had any contact with him for several years. Allison Castle, a spokeswoman for Perry, said the governor didn't have "a long-standing friendship" with Feste. "He contributed. Beyond that, we haven't heard from him in a while."
According to U.S. District Court filings in Austin by NetJets, Feste took 27 flights over four months in late 2003 and early 2004. U.S. Magistrate Judge Andrew Austin said in a July ruling that Feste created a company, Feste Capital Management, to pay the lease fees.
But "when the time came to make the lease payments, it turned out FCM could not," Austin wrote. "In fact, FCM had no assets and its sole purpose was to own the NetJets lease."
The magistrate found that nine different companies owned by Feste had taken plane trips "that were apparently 'gifts' from FCM to these companies," which included the Wranglers.
Feste had "just a verbal agreement with himself" that the companies could use the lease, the magistrate said. On Oct. 15, Austin recommended NetJets take control of certain assets of Feste's holding company to try to collect its money. NetJets first won a judgment in 2005 against Feste in U.S. District Court in Ohio for $331,000 in unpaid bills; the company is pursing the judgment in federal court here because Austin is listed as the headquarters for most of Feste's companies. Interest on the $331,000 judgment is more than $80,000 so far. With attorneys' fees added, Feste could easily owe $500,000 to NetJets. The jet-leasing company is a subsidiary of billionaire investor Warren Buffett's Berkshire Hathaway Holdings. U.S. District Judge Lee Yeakel has yet to rule on the magistrate's recommendation.
In his July ruling, Austin said Feste was "intentionally evasive" in a deposition and demonstrated "a remarkably faulty memory," answering "I don't know or "I don't recall" to more than 100 questions.
The Wranglers club, which paid $12 million to join the AFL, this year moved down to Arena Football 2. The money initial investors put up is gone, team President Doug MacGregor said Wednesday.
Most of Feste's other businesses appear to have dissolved ¡ª corporate charters forfeited, no phone numbers. His most recent venture, an Austin-based chain of Cheesecake Kitchen restaurants, filed for bankruptcy protection in Austin in July, less than two years after raising $2.6 million from investors.
The Austin restaurant was Feste's second franchising venture. In 2003, he announced a franchising deal to bring 28 Whataburger restaurants to the Jacksonville, Fla., area with an investor group that included Schneider, Mark Brunell, then the Jacksonville Jaguars' quarterback, and Tony Boselli, a former Jaguar.
Feste left the investor group within a year, according to Schneider and the group's current president, Paul Kraszeski. "Thank goodness," Kraszeski said. "Obviously he's had some difficulties, and we didn't want them spilling over here." Schneider said Feste raised a lot of money for the Whataburger partnership, "but it also was something that took a lot of money to build." When Feste couldn't come up with additional money, the other partners forced him out, Schneider said. Feste was also forced out of the Wranglers shortly after its inaugural season ended in 2004, MacGregor said.
"When I was asked to invest and join the Wrangler management group, one of the conditions was that he not have any involvement," said MacGregor, a former Dell Inc. vice president. MacGregor said he "couldn't determine" the financial status of the team under Feste's stewardship. "The records were not in very good shape," he said, declining to be more specific. Schneider said he remains an investor in the Wranglers, which he saw as an opportunity to get involved in pro sports.
Feste "just tried to do too many things at once," Schneider said. "None of them were bad ideas." "He raised a lot of money from a lot of different people, and he lost a lot of money," particularly on the Wranglers, Schneider said. "He was kind of like a promoter who put things together. And once the money was gone, he left."
MacGregor was not an initial investor in the Wranglers, but Feste attracted plenty of interest. Among the investors: Schneider, several current and former NFL players, including Boselli, Brunell, now with the Washington Redskins; and former NFL running back Glyn Milburn, who is the Wranglers' director of player personnel. Boselli and Milburn didn't return calls for comment.
Feste's connection to these NFL veterans, though, started in the 1980s after a series of business setbacks. In the late 1980s, as a stockbroker in Houston, Feste agreed to $254,000 in settlements with customers and a one-day suspension for "unsuitable recommendations" of stocks, according to the Financial Industry National Regulatory Authority. Shortly afterward, Feste launched a real estate company in Houston. But in 1989, he filed for bankruptcy, listing $3.8 million in debts.
He told the Chicago Tribune in 1998 that in the wake of those failures, a longtime friend, Greg Ball, "introduced me to Jesus Christ." "Now He's it," Feste told the paper. "He's everything I got." Ball ran a charity called Champions for Christ, a group for pro athletes. Feste became a sports agent focused on the Christian athletes.
But the business started to dissolve after Feste negotiated a bargain-basement contract for Chicago Bears running back Curtis Enis, a highly touted rookie who got less than one-sixth of what he had asked for. Enis later fired Feste, according to the Chicago Tribune. Feste's company also handled endorsement deals for other outspoken Christian athletes, including Brunell.
Milburn, a Wranglers executive and investor, has also been active in Christian athlete groups.
The Wranglers decided to drop to AFL 2 for the next season, which starts in April. The club will save money because AFL 2 players are paid just $200 a game. The club itself isn't worth much, either. The cost of an AFL 2 franchise, MacGregor said, is about $500,000.
The Feste file
Greg Feste has incorporated 57 businesses in Texas; most have forfeited their charter or voluntarily dissolved. Selected events from his business history:
1987: A stockbroker, he pays $254,000 in settlements to four customers; regulatory agency suspends him for one day because of 'unsuitable recommendations' to clients.
1989: Files for bankruptcy in Houston; blames soured real estate deals.
1990: Emerges from bankruptcy proceedings having shed $3.8 million in debts.
1992: Forms Executives for Christ, a nonprofit aimed at teaching Christian principles to corporate executives.
1995: (circa) Forms Malachi Foundation to fund ministries; later changes name to FesteCapital Foundation.
1998: Curtis Enis, a rookie Chicago Bears running back, becomes a born-again Christian and hires Feste as his agent. Enis switches agents the next year.
2003: Feste announces plans to develop Whataburgers in Jacksonville, Fla., area, then is forced out by other investors.
2004: Austin Wranglers begin play in the Arena Football League; Feste forced out of management that year and no longer owns any part of team.
2005: Feste is part of a group that sells a building to Austin brokerage Tejas Securities.
2007: Feste's restaurant corporation files for reorganization in bankruptcy court. The case is later converted to a liquidation.
