Government , Legal

Partial settlement reached in one of the LLC-related lawsuits

The Osage Nation and its Tallgrass Economic Development LLC reached a partial settlement in its lawsuit regarding a 2010 investment with now-defunct broker dealer company EquityStation, Inc.

The Nation is receiving back $141,495, according to attorneys working on the investigation into the former Osage Limited Liability Company investment activities executed under the management of former CEO Carol Leese, up until his resignation in 2014. As of March, the Nation has three pending lawsuits against Leese and business associates of his regarding LLC investments and business partnerships that resulted in millions of dollars in losses, prompting the investigation shortly after Principal Chief Geoffrey Standing Bear took office in 2014.

Attorney Amanda Proctor, whose law firm is working on the investigation, and ON Attorney General Holli Wells announced the settlement update to the Fourth ON Congress on March 15 during a Commerce and Economic Development Committee meeting.

Proctor said the lawsuit against EquityStation Inc. is still pending against other defendants, including Leese for damages associated with the investment that generated no revenue to the Nation. In 2010, the LLC purchased 249 shares of EquityStation for $800,000 from vFinance, according to the July 2015 lawsuit filed in Osage County District Court.

Proctor said vFinance will be added as a defendant in the case as part of the settlement agreement and said she believes that entity sold EquityStation as “a worthless company” to the LLC.

With the settlement agreement approved by the Tallgrass Economic Development LLC board of directors, Proctor said there remains roughly $660,000 in outstanding claims in the EquityStation, Inc. case pending against Leese.

On July 20, 2015 the Nation filed the second suit in state court against Leese, former LLC CFO Robert Petre; and Michael Morrisett who worked as a financial advisor and for now-defunct LLC subsidiary Osage Investments LLC.  

In its complaint, the Nation said Leese asked the ON Congress for a $7.5 million appropriation in 2010 to fund several economic development projects, including an investment with EquityStation, which was approved by the LLC board that year. According to LLC management at the time, the EquityStation investment was to provide the LLC with “access to an investment banking platform.”