Near claimed in his lawsuit that Richardson, Texas-based Titan offered to buy Independence, Kansas-based Crescent last year but instead siphoned off money, which caused the financial problems leading to its bankruptcy. He also said Titan forced him out in March without paying him for his stock shares, leaving him millions of dollars in debt. (Click here for previous CSP Daily News coverage.)
In their response, Titan executives deny Near's claims, said AP. They also have countersued, alleging that it was Near who committed fraud against Titan during the acquisition process.
The countersuit claims Crescent was already close to bankruptcy before Titan began considering an acquisition. It alleges that Near covered up the depth of the company's financial problems through a series of secret agreements with certain convenience store customers.
The agreements created large accounts receivable, or amounts Crescent expected to be paid for fuel deliveries, on the company's books. But Titan said the customers were told they wouldn't have to pay those accounts and, in fact, Near executed agreements with the customers in November canceling those payments.
"Near's actions in forgiving such accounts receivables caused a sudden and intense deterioration in the working capital available to Crescent, causing Crescent to enter bankruptcy," Titan's response reads. "Once Crescent entered bankruptcy, the truth about Near's mismanagement and fraudulent activities slowly began to surface, and various operators of convenience stores to which Crescent supplied fuel began telling Titan story after story about the secret 'off-book' agreements that Near had orchestrated with such operators."
The Titan executives claim that because they relied on the financial information provided by Near as accurate, they were defrauded and are demanding damages.
Michael Pospisil, one of Near's attorneys, on Wednesday dismissed Titan's response, noting that the filing provides no details on the alleged "off-book" agreements or which customers were involved. "The claims are absolutely 100% false," Pospisil told AP.
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