LAS VEGAS (CN) – The CEO of “What’s On, The Las Vegas Guide” bilked the company of more than $500,000, Kellogg Media Holdings claims. Kellogg claims David Peeler used the money to pay his mortgage, fix up a Porsche and a Mercedes he kept 2,000 miles away, and to take vacations and buy lacrosse equipment for his kids, among other things.
Kellogg says it hired Peeler as its first CEO in 2009 to oversee the finances and market its biweekly magazine. The company claims that in the summer of 2010 “KMH’s executives became aware of Peeler’s instructions to subordinate employees to disburse to Peeler vast monies, purportedly expended by Peeler for KMH business purposes, without Peeler providing any substantiation of such expenses …”
The complaint adds: “Far from being legitimate business expenses, Peeler made personal mortgage payments and paid: (a) for meals at restaurants in Connecticut and elsewhere that were not business related; (b) for more than one vacation; (c) his loan payments, insurance, repairs and new tires for a Porsche (located in Connecticut and not in Nevada); (d) for repairs to a Mercedes Benz (also located in Connecticut and not in Nevada); (e) for lacrosse equipment for his children; and (f) for contributions/donations to schools in Connecticut, among many other leisure and personal consumer items, services and trips. Over a thirteen month period, these personal and non-business expenses amounted to more than $500,000 which were reimbursed by KMH.”
Not surprisingly, Kellogg claims, during Peeler’s tenure the company “experienced a decrease in revenues, an increase in expenses, a seemingly shrinking market for the ‘What’s On, The Las Vegas Guide’ magazine, widespread employee discontent, the lack of any cogent strategic plan to grow the company’s business and, as mentioned, misappropriation by Peeler of company funds.”
Kellogg says it fired Peeler for cause on Oct. 5, 2010, then discovered “that Peeler had engaged in self-dealing by diverting KMH opportunities away from KMH and to companies formed/controlled by Peeler and had even exposed the company to significant liability by actually signing contracts on behalf of KMH’s financier, an entity with which Peeler had no affiliation, employment, agency or other relationship.”
Plaintiff seeks compensatory and punitive damages for fraud, breach of contract and conversion.
It is represented by Howard Russell with Weinberg, Wheeler, Hudgins, Gunn & Dial.