KPM shareholder claims breach of contract

Age and gender discrimination claims made separately by a shareholder and a former manager of Springfield accounting firm KPM CPAs PC have initiated one lawsuit against the company, and another might be on the way.

Larry Ellison, a former 17-year employee with KPM CPAs, filed a breach-of-contract lawsuit against shareholders of the Springfield accounting firm.

The suit claims Ellison faced age discrimination at KPM, prompting him to leave in July and start his own firm. He currently remains a shareholder of BTC Partnership LLP, which comprises KPM shareholders to manage the physical assets of the firm.

Ellison said he and Brooke Liggett, Ellison’s current business partner, each recently filed discrimination claims against KPM CPAs with the Missouri Commission on Human Rights. Ellison’s claim relates to age discrimination, and Liggett’s relates to gender discrimination, he said.

Ellison’s contract suit, which was filed in Greene County Circuit Court on April 10 – five days before Tax Day – is against BTC Partnership LLP.

In the case, Ellison is asking to be paid for his ownership share in BTC, plus $500,000 in punitive damages – or the lesser of five times his actual damages – to deter the company from similar conduct in the future.

Ellison referred specific questions about his experiences to his attorney, Randy Scheer of Sanders Warren & Russell LLP.  Scheer declined a request for an interview because the litigation is pending. Missouri Commission on Human Rights officials denied a request for the claims filed, citing the organization’s confidentiality policy.

Ellison and Liggett in August launched EllisonLiggett Litigation Consultants, a certified public accounting firm geared toward business valuation and litigation services. Liggett, a former manager at KPM, worked for the company 11 years.

“At this point, the litigation only relates to the building partnership,” Ellison said. “There are three building assets included in that partnership, but the CPA firm itself is not included in the litigation.”

Ellison said Scheer would need to speak to whether a separate discrimination case would be filed against KPM or its shareholders.

Liggett declined to comment, and also referred all questions to Scheer, her legal representative. She declined to say if a discrimination suit was in the works, and no discrimination lawsuits had been filed against KPM CPAs as of April 17.

KPM Marketing Director Crystal Mapp declined an interview on behalf of company officials, citing advice from an attorney.

Court records indicate the company was served the lawsuit on April 14. No attorney representing the defendant, BTC Partnership, was listed in online court records by press time.

According to the case filing, plaintiff Ellison said he was the oldest employee holding shares of the company when he left the firm on July 31.

The suit claims Ellison was constructively discharged, which refers to an illegally hostile work environment that forces an employee to resign. However, the allegations in the case say little about those conditions.

“Over the course of the last few years leading up to (Ellison’s) constructive discharge from KPM, and to the present time, the other shareholders at KPM have taken steps to discriminate against (Ellison) due to his age and/or to retaliate against (him),” the suit charges.

In mid-December, Ellison notified BTC in writing of his intent to withdraw as partner.

“The pattern and practice of discrimination and/or retaliation against plaintiff by the shareholders at KPM, who are also partners in BTC, continues to this day in that the manner in which they are treating plaintiff’s withdrawal from BTC has been vastly different from the way they treated younger partners who left BTC and/or all other partners who have left BTC,” court records say.

Ellison alleges in the suit BTC determined his interest in the company was $150,354 at the time he left KPM.   

But the real value of Ellison’s interest in the company is unclear, and there is confusion whether payment was actually issued.

According to the suit, the appraisal of BTC’s assets used to determine Ellison’s interest did not occur until November 2013, and BTC did not move to buy him out until January. Ellison says in the suit he was only provided financial information on the company through July 31.

Additionally, the suit alleges BTC issued a K-1 tax document indicating the company already paid Ellison $164,500 for the value of his interest in BTC through Dec. 13, but Ellison claims he never received any money. Based on the timing of KPM’s November appraisal and the terms of the shareholder’s agreement, the case claims Ellison should have been paid on or before Feb. 17.

According to online court records, there are no scheduled hearings in the case.

The suit comes at a time of change for KPM.

With a long-term lease agreement in place, commercial real estate firm Bill Beall Co. is building the accounting firm a $6 million headquarters at 1445 E. Republic Road. Its current office, a 19,000-square-foot office property at 2003 E. Sunshine St., is up for sale, listed by David Murray of R.B. Murray Co. for $2.2 million.

The new 50,000-square-foot structure on Republic Road is designed to accommodate KPM CPAs following its January merger with accounting firm Davis, Lynn & Moots PC. Discussions on merging the two firms began in November 2012, according to Springfield Business Journal archives.

Officials with the firms have told SBJ the merger was attractive because of their companies’ different areas of focus. KPM has traditionally served the manufacturing, distribution, financial and auto dealership industries, while DLM specialized in the education, government and nonprofit sectors.