For background on this posting:
http://janbtucker.com/blog/2012/04/11/mount-kellett-out-of-control/
http://janbtucker.com/blog/2012/04/06/will-mount-kellett-ever-learn/
http://janbtucker.com/blog/2012/03/23/what-is-mount-kellett-thinking/
http://janbtucker.com/blog/2012/03/20/mount-kelletts-war-on-workers/
http://janbtucker.com/blog/2012/03/16/romneyizing-los-angeles/
A lawsuit was filed in Los Angeles Superior Court on April 19, 2012, Case No. BC 483127 (S.C. Prestige Parking, Inc. vs. Keybank) in which the record of Mount Kellett Capital Management and Evoq Properties, Inc. (Mount Kellett’s target of a successful hostile takeover orchestrated in Bankruptcy Court) is at issue. Amongst the allegations against Mount Kellett are some real gems:
- The disparate impact against minorities and immigrants was in part instigated in connection with a “mixed motive” scenario, in which higher management from Mount Kellett Capital Management directed the managers of Evoq to engage in a course of conduct designed to eliminate or at least restrict the cash flow into Evoq to drive its stock price down and thereby enable Mount Kellett to get more control over the stock of Evoq at a cheaper price.
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Plaintiff is informed and believes and thereon alleges that the effort to obtain more Evoq stock cheaply was in turn, part and parcel of a scheme to merge Baja Mining, a British Columbia corporation and potentially other entities and assets into a new corporation.
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Another motive in the mix which precipitated discrimination against minority owned firms was a scheme that enabled the conversion by Evoq of the proceeds of an insurance payout that was predicated upon the need to repair roof and water damage to minority owned businesses; instead of making the repairs, Evoq constructively evicted the tenants to avoid making the needed and necessary repairs.
- One of the managers brought into Evoq by Mount Kellett engaged in quid pro quo sexual harassment and sex discrimination by insuring higher pay for at least one (and maybe more) women who were sleeping with him and/or keeping quiet about his affairs.
- The new management brought in by Mount Kellett fired an employee for no other apparent reason other than that he was Gay.
- The lawsuit alleges that Mount Kellett’s management directed the managers of Evoq to cease hiring employees who spoke foreign languages and to take discriminatory action against minority owned business contractors that Evoq had longstanding relations with.
The Intrigue of Securities Fraud Litigation
Perhaps most intriguing about the lawsuit is the Twelfth Cause of Action for Declaratory Relief re Securities Fraud as defined in 17 C.F.R. § 240.10b-5. If the allegations are true, the implications are that the Bankruptcy court’s ouster of the Meruelo - Maddux management (Evoq was formerly “Meruelo Maddux Properties, Inc.”) is invalid. The suit alleges that an unlawful stock dilution effectively robbed secured creditors who held claims against the common stock of Evoq of their assets as well as control of the corporation and its subsidiaries.
Click below to see the Complaint filed in Los Angeles Superior Court Case No. BC 483127:
http://www.janbtucker.com/files/S_C_SCP_v_KeyBank.pdf
MOUNT KELLETT’S STRANGE BEDFELLOWS IN LOS ANGELES REAL ESTATE
Strange Bedfellows
As noted in my past postings on Mount Kellett, COO Jonathan Fiorello contributed to Rep. Michelle Bachmann on the very day that she accused then candidate for President Barack Obama of being a socialist, while CEO Mark McGoldrick gave $50,000 to John McCain while McGoldrick was living in London. So some might think it unlikely that a company with extreme right wing leanings (like Bachmann supporters at the helm) would get into bed for a real estate deal with a company headed by a liberal Democrat….but amongst the 1%, as Bob Dylan once sang, “Money doesn’t talk, it swears.”
Rising Realty Partners bought the PacMutual (Pacific Mutual) building at 6th & Olive with financing from Mount Kellett. CEO Nelson Rising is a big and regular contributor to liberal Democrats, who one might think would be appalled at jumping into a financial bed with a company that is alleged to have discriminated against women, minorities, immigrants, and Gay people, but that seems to be precisely what happened here.
In 2011 alone, Nelson and Sharon Rising gave $35,800 each to the Obama Victory Fund 2012. They also gave $30,800 each to both the Democratic Congressional Campaign Committee and the Democratic National Committee in 2011. The Risings have also contributed to Representatives Adam Schiff, Howard Berman, Janice Hahn, Xavier Becerra, Jane Harman, and Nancy Pelosi; Senators Barbara Boxer and Dianne Feinstein of California and Senator Jon Tester (Montana), and even my friend Assembly Member Anthony Portantino.
Saul Alinsky once said that “Power goes to two poles: to those who’ve got the money and to those who’ve got the people.” Contact me to find out how you can enlist on the side of the people-the 99%-against those who’ve got the money (the 1%): [email protected]
