Big Four Accounting Firm Called a Big Liar
DALLAS (CN) - PriceWaterhouseCoopers steered the dying, elderly founder of a Dallas metals company into making $8.5 million in ill-advised loans, his estate claims in court.
The estate of Thomas E. Bentley sued the accounting firm in Dallas County Court.
Bentley founded The Richardson Trident Co. in 1962 as a distributor of raw and fabricated metals. He sold it to a competitor, Metals USA, in 2011.
His estate claims that PriceWaterhouseCoopers and its Dallas-based partner Alan King, of Dallas, took advantage of him after the sale.
"Realizing that Mr. Bentley was receiving a large cash payment from the sale transaction, Mr. King, acting as a financial advisor with PWC, fraudulently induced Mr. Bentley to make a series of substantial but very risky loans to defendant Vann Energy Services LLC," the 13-page complaint states. "Vann was a small, poorly run oil and gas equipment transportation company."
Despite the reference to Vann as a defendant, the only defendant in the lawsuit is PriceWaterhouseCoopers.
Bentley's estate claims that King was also a principal of Vann, and that he ignored the conflict of interest and fiduciary duties owed to his client. It claims the $8.5 million in loans were structured so that the "vast bulk" of repayments would not be due until mid-2015.
"Given that Mr. Bentley was 82 years of age and in poor health, it was outrageous that the bulk of his available cash assets were tied up in a series of risky loans that would not be repaid for several years," the estate says in the lawsuit.
The estate claims that King told Bentley several lies, including that Bentley had perfected first security interests in Vann's assets, that Vann had substantial revenue and large net income and the ability to pay him back.
"This was not true, as Vann struggled to stay solvent and pay its bills," the complaint states. "Moreover, Mr. King falsely promised that Vann would soon be 'going public' and that Mr. Bentley would be quickly repaid."
The estate claims that Bentley was also told that his money was used to buy hard assets, but that it actually was spent on "a variety of impermissible and fraudulent purposes," including funding other companies.
"Any loan or investment in Vann was highly inappropriate for an elderly individual such as Mr. Bentley," the complaint states. "Moreover, Mr. Bentley had large monthly expenses and owed substantial taxes ... Yet, PWC made no provisions for those expenses or taxes. Instead, it allowed its partner to induce Mr. Bentley to loan most of his available cash to Vann. As a result, in the last year of his life, Mr. Bentley tragically struggled to pay his expenses and was unable to pay his taxes timely." Finally, the estate claims that after Bentley died, Vann defaulted on the loans and still owes more than $5 million.
PriceWaterhouseCoopers did not respond to a request for comment Friday.
The estate seeks actual and punitive damages for breach of fiduciary duty, fraud, professional negligence, aiding, abetting and conspiracy. It is represented by Jeffrey Tillotson with Lynn Tillotson in Dallas.