ANDERSON — A former HomeGold manager who left the company in 2002 ordered corporate documents destroyed five weeks ago, including some seen only by the highest-level executives, witnesses testified in federal court here Tuesday.

Former HomeGold executive vice president Tony Park is among the nearly two dozen defendants in a lawsuit filed last fall by the trustees appointed by the U.S. Bankruptcy Court to recover some of the $350 million owed to investors, suppliers and others.

The trustees have been sifting through literally tons of documents seeking evidence after the March 2003 bankruptcy filing. But trustees did not know until last month that Park had stored thousands more documents in a mini-warehouse in Greenville.

They found out after the man Park hired to dump the documents contacted HomeGold’s lawyers. The whistle-blower kept some of the documents, which he turned over to HomeGold lawyers, who in turn contacted the State Law Enforcement Division.

At stake are million of dollars HomeGold is seeking from Emmco, a company formed a few months before HomeGold’s bankruptcy by its former chief executive, Lexington businessman Ronald J. Sheppard.

HomeGold’s lawyers tried to link Park to Sheppard and have asked U.S. District Judge G. Ross Anderson to punish Sheppard’s current mortgage company, Emmco, by making the Lexington company automatically liable for damages. The only question in a trial would be how much Emmco would have to pay.

In order to rule against Emmco, Anderson said, HomeGold’s trustees must show the documents destroyed would have been used as evidence. He will hear closing arguments on the issue April 15.

Anderson said it appears documents were destroyed. “I don’t want anybody playing games with the federal court, especially this one,” he said.

Among the documents recovered were daily cash reports, which one former HomeGold manager said were highly confidential. Anderson said he would look closely at the daily cash reports, and he asked lawyers to find out when those reports started and what happened to them.

It was unclear from testimony whether the report that Park had was a duplicate or part of the mass of missing information from HomeGold.

James Brazeale, who worked as a loan officer for HomeGold in 2001 and Park’s Mortgage Exchange from April 2002 until its collapse in December, said he recalled visiting Park at his home last year and Park implying he had information damaging to Sheppard on a computer diskette.

“He held up a disk and said, ‘I have Ronnie right here,’” Brazeale said.

Sheppard hired Park in 1999 to work for Sheppard’s HomeSense mortgage company. After HomeGold bought HomeSense in May 2000 and appointed Sheppard chief executive, Sheppard put Park in charge of running loan offices in Greenville and Lexington and opening a loan office in Cincinnati.

Park testified he received documents and computers in late 2001 after he left HomeGold to start Mortgage Exchange, a competing company in Greenville. Park said he was given permission to take the documents and equipment by Forest Ferrell, HomeGold’s president until its bankruptcy a year ago.

Park testified that he was not trying to hide information from HomeGold’s trustees. He said he wanted the documents out of his storage facility before they were seized because he was unable to pay the bill.

He said Ferrell also granted him $250,000 in severance pay in return for agreeing not to hire away HomeGold’s loan officers.

“The perception was I would take most of the loan office,” Park said. “He basically authorized me to launch the business so it would succeed.”

Mortgage Exchange folded in December, and in February, Park asked a contractor to get rid of the files and equipment.

Sheppard, who was chief executive and Ferrell’s boss, testified that he did not authorize Park to take computers or documents and that he did not know beforehand that he would do so.

“I was told Forest Ferrell, who is deceased, authorized Park to take the documents,” Sheppard said.

But other witnesses said Park told them he had received the documents and computers from Sheppard. Park testified that Sheppard came to Mortgage Exchange last year to help Park close some loans.

Testimony by Karen Miller, a chief financial officer who worked seven years for HomeGold, disputed Park and Sheppard’s contention that Ferrell agreed to give Park computers, loan files and cash to set up a competing business.

Miller said the daily cash reports were highly confidential, given regularly only to Sheppard, chairman Jack Sterling and the chief financial officer.

Park’s own testimony appeared to clash. He said some of the non-loan documents recovered after he ordered them tossed were documents he carried to New York in 2000 to help persuade its chief lender not to pull $50 million in loans.

Later, he said he didn’t know how far in debt HomeGold was.

“You didn’t have a financial statement?” Anderson asked, noting that information was in public documents on the Internet.

“When you work for Mr. Sheppard, you work at what’s in front of you,” Park said. “Your head’s down. It’s kind of like being in battle.”

Reach DuPlessis at (803) 771-8305 or jduplessis@thestate.com