Dive Brief:
- Mountain Express Oil’s founder and former co-CEOs have been summoned to a trial by jury in the U.S. federal court in Atlanta for siphoning more than a hundred million dollars from the now-defunct convenience retailer, according to complaints filed with the U.S. District Court for the Northern District of Georgia.
- In a March 17 complaint, the retailer’s bankruptcy trustee stated that Lamar Frady and Turjo Wadud, co-CEOs from 2020 to 2023, funneled over $15 million from Mountain Express’s hundreds of sale-leaseback deals into separate entities they owned. In a complaint filed in late February, the trustee also stated that Mountain Express founder Barry Bierenbaum siphoned over $130 million, mainly from selling his stake in the company to Wadud and Frady in 2020.
- Mountain Express’s former leaders have been under court-driven investigation since the retailer ceased operations amid Chapter 7 bankruptcy in late 2023. This marks the first litigation to come against these individuals.
Dive Insight:
After Mountain Express ceased operations in August 2023, the bankruptcy court conducted examinations of leaders and other individuals involved with the company. Points of focus during this phase included Mountain Express’s accounting and auditing done between 2017 and 2023, other business entities Frady and Wadud owned or controlled, and Mountain Express’s acquisition history.
Frady and Wadud were examined in September and October 2023, respectively, court records show. By March 2024, the court revealed it was officially investigating Frady and Wadud over the siphoned funds. That investigation appears to have reached a conclusion.
“Through this action, the Trustee seeks to recover damages caused by [Frady and Wadud] through their unlawful conduct and conspiracy and to strip them of their unlawful and illicit gains,” Janet Northrup, Mountain Express’s trustee, wrote in the March 17 filing.
Although Bierenbaum was examined in May 2024, the court hadn’t until now revealed any investigation into the company’s founder. According to the late February filing, Bierenbaum and his wife, Gail Bierenbaum , siphoned over $130 million in 2020 between “shareholder distributions” to themselves for years and a scheme to sell their interest in Mountain Express back to the company. This left Mountain Express — as well as new co-CEOs Frady and Wadud — “saddled” with around $100 million in debt, according to the filing.
All three executives have now been summoned to a trial by jury regarding their siphoning of funds, as well as for breaching their statutory and fiduciary duties as heads of the company. Each complaint requests the court grant actual, compensatory and punitive damages against Frady, Wadud and Bierenbaum. It’s unclear exactly how much money the trustee is looking to recoup from both parties.
Editor’s note: The teaser of this story was updated to correct the amount Barry Bierenbaum is accused of siphoning.
