KANSAS CITY, Kan. (CN) – A bankruptcy trustee claims insiders in a wind power venture took the company for millions of dollars, sticking it with $6 million in debt while taking the $13 million in sales for themselves.
On behalf of Generation Resource Holding Co., bankruptcy trustee Eric Rajala filed the federal complaint against Lookout Windpower Holding Co., and Forward Windpower Holding Co.; president of both companies is alleged “insider” Robert Gardner of Leawood, Kan.
Also named as defendants are Freestream Capital, Gardner Family Investment Co., and Stevens Family Investment Co.
The trustee claims Gardner transferred his ownership of Lookout Windpower and Forward Windpower to hide assets from Generation Resources and its creditors.
Gardner and his wife owned one-third interest in Generation Resources, which is in bankruptcy, according to the complaint.
“The claims against the Insiders arise from and relate to the Insiders use of GRHC to
develop three wind power projects named Stoney Creek Windpower, Forward Windpower and Lookout Windpower, and manipulation of separate holding companies owned by the Insiders to fraudulently isolate the Lookout and Forward projects from GRHC,” the complaint states.
“The Insiders have and continue to try and force GRHC to pay all the debt from the projects (about $6 million) and the Insiders keep the entire sales proceeds for themselves (about $13 million).” (Parentheses as in complaint.)
Rajalla claims the defendants formed 15 entities to hide assets from Generation Resources. On behalf of Generation Resources, he seeks more than $25 million in damages for breach of contract, plus punitive damages for RICO violations.
The trustee already has sued “numerous individuals” in the same court, and plans to consolidate the cases.
The “insiders” include William and Akiko Stevens, husband and wife, of Newton, Conn., who owned one-third interest in Generation Resource. William Stevens was vice president of GRHC. He allegedly used his ownership of Lookout and Forward Windpower “to manipulate and hide assets from GRHC and its creditors.”
Also named as insiders are James and Virginia Ansel of Tucson, who owned one-third of GRHC; James Ansel was its president. They too are accused of using their ownership of Lookout and Forward Windpower “to manipulate and hide assets from GRHC and its creditors.”
“GRHC Vice-President Robert Gardner, President James Ansel and Vice President
William Stevens are hereinafter sometimes collectively referred to as the ‘Officers.’ The Officers controlled GRHC and owed it and its creditors fiduciary duties including the duty of loyalty and due care. The Officers transacted business and committed torts in Kansas which are the subject of this Lawsuit,” according to the complaint.
Rajalla is represented by Michael Healy of Kansas City, Mo.
The complicated, 88-page complaint was filed Monday, two days before the Obama administration, in an unrelated case, approved the nation’s first offshore wind farm, a 130-turbine project off the coast of Cape Cod. Several environmental groups opposed that project.