CEO’s $17,000 Birthday Party Spurs Commodity Brokerage Lawsuit
(Bloomberg) -- One of Houston’s largest commodities brokerages is being sued by its co-owner who alleges that the lavish personal spending of its top executives left the company “deeply in debt.”
John Klosek, founding partner of Houston-based OTC Global Holdings LP, filed suit Monday against several of the company’s employees, including Chairman and Chief Executive Officer Javier Loya and Chief Operating Officer Joseph Kelly. The suit, filed in Harris County District Court, alleges that extravagant spending by Loya, Kelly and others drove the company’s value to “a negative net worth.”
“The company and individuals named in the lawsuit deny the accusations and will take all appropriate actions to protect the interests of the company,” an OTC spokesman said in an statement Tuesday night.
Among the alleged examples of Loya’s excessive spending were a $17,000 “Sweet Sixteen” party for his daughter, an $8,000 night out in Aspen, and regular $4,000 dinners at Nobu Houston. Loya and Kelly are accused of paying themselves millions in unauthorized compensation, and of borrowing $4.2 million in unsecured, interest-free loans.
“This misconduct barely scratches the surface of their self-dealing and breach of duties,” Klosek alleges in the lawsuit. “Credit card charges are so extravagant they almost appear to be surreal.”
Klosek said his efforts to seek further details about the expenses in question were rebuffed and that he is seeking to recover damages, immediately cancel the employees’ company-issued credit cards and terminate Loya’s employment. The suit also names Loya’s assistant, who is accused of racking up $250,000 in credit card charges, and five unidentified individuals alleged to have helped the OTC officials in their misdeeds.
©2019 Bloomberg L.P.