Exotic animal case gets wilder
S.A. company files counterclaim against ex-exec who sued it
Wildlife Partners LLC, a San Antonio-based exotic-wildlife breeder, has turned the tables on a former executive suing it for alleged wrongdoing.
The company, which bills itself as the “largest buyer and seller of high valued exotic wildlife in the United States,” accuses former President and COO Joseph Gullion of fraud, stealing and incompetence in a counterclaim.
“Gullion is a parasite,” Wildlife Partners and its founders, brothers Brian and Chris Gilroy, charge in their action. “He represents himself as an executive experienced in taking small companies to the next level. But when hired, Gullion attaches himself to his host and sucks it of whatever money and benefits he can before his theft and incompetence are discovered.”
Gullion gave himself a “huge” raise, submitted thousands of dollars in improper expenses and rewarded “lackeys” he hired with such perks as cars and horses.
The counterclaim was filed last week in state District Court in San Antonio, 40 days after Gullion sued the company and the Gilroys.
Gullion accuses the Gilroys of failing to maintain proper records for tracking animals and revenue and expenses, commingling funds and using company assets to support their lifestyles.
The company has been paying for Brian Gilroy’s truck, his wife’s luxury SUV, Spurs tickets, and golf and gym memberships, Gullion alleges.
Ryan Reed, who represents Gullion, declined to respond to
the counterclaim his client.
Reed, in an August interview about Gullion’s complaint, said they were “blowing the whistle” on Wildlife Partners. Besides his own claims, Gullion is suing on behalf of investors, alleging violations of Texas securities laws, including that the company sold unregistered securities. He wants the court to appoint a receiver to run the firm.
Wildlife Partners has created partnerships that own herds of exotic animals. Investors can buy the animals, such as zebras, gazelles and ibexes, to keep on their own property or on its ranches. It charges a fee for the latter. It operates ranches in Mountain Home in the Hill Country and Pettus in Bee County, where it breeds more than 50 species of exotic wildlife.
The entire investment is tax deductible the first year, its complaint states.
The company will purchase animals from any investor who wishes to sell, generally at 70 percent of retail value, the court document adds.
National Geographic reported in July that buyers include wealthy land owners who enjoy owning the creatures, as well as commercial hunting operations. against Hunting is a “significant driver of this amazing industry,” but no hunting occurs on any properties used for Wildlife Partners’ partnerships, the company’s website says.
The Gilroys created Wildlife Partners “with the goal of using economic incentives to promote exotic wildlife conservation,” according to the counterclaim.
Brian Gilroy, who spent 20 years in oil and gas financial services, invested $2 million in the company in 2016. The brothers later put in an additional $4.5 million. They also sold a percentage of the company to investors.
Wildlife Partners generated $10 million in revenue its first year and more than $13 million the following year. It turned an undisclosed profit both years but experienced “inevitable growing pains,” the company says in its court filing. Staff “struggled to properly track the purchase and sale of wildlife.”
Brian Gilroy and Gullion met on a plane to California. While Gullion says Brian Gilroy lobbied him to join the company, Gilroy says it was Gullion who “repeatedly pursued” him.
“He represented … that he had taken multiple companies and developed them into multibillion-dollar organizations,” they allege.
Gullion is a former president of Boeing Airplane Services.
Gullion became Wildlife Partners’ president and chief operating officer in April 2018 at an annual salary of $150,000. He also received a 5 percent ownership stake, though Wildlife Partners says the interest would be forfeited if he resigned within three years.
The counterclaim adds that Gullion “secretly terminated his employment contract” at the end 2018, saying he had become a “partner” with “guaranteed payments.” Wildlife Partners says Gullion didn’t become a partner because it’s not a partnership.
Gullion later had the company’s CFO, whom he hired, increase his compensation by $100,000, the counterclaim says. Gullion ultimately had to fire the CFO after he was “found to have embezzled $18,000” from the company, the document adds.
Wildlife Partners posted almost $14 million in revenue last year, up from about $10 million in 2018. Yet it “sustained losses both years” after registering profits its first two years in business, its court filing says. It blames the losses on Gullion’s “theft and mismanagement.”
Besides giving himself a $100,00 raise, Gullion received “thousands of dollars” in reimbursements he wasn’t entitled to, the court filing says.
Meanwhile, overhead increased 60 percent under Gullion’s watch, the counterclaim says. Wildlife Partners attributes the increase to his “theft” and the hiring of his girlfriend’s relatives, who “were either complicit with Gullion’s theft or were incompetent,” the counterclaim states.
Gullion had the company pay the tuition of his girlfriend’s brother “to get accounting training he should have already had,” the complaint says.
Wildlife Partners also accuses Gullion of engaging in tax fraud in connection with a 51 percent stake he and the Gilroy brothers acquired in Microtracks, a company that develops technology for tracking animals. The trio each got 17 percent but the counterclaims says Gullion sought to get his interest “tax free.”
“When (Wildlife Partners) refused to engage in the tax fraud Gullion proposed, he (threatened) — in front of multiple … employees — to ‘burn the house down,’ destroy the company, go to the SEC (Securities and Exchange Commission) and expose (the company) to the media,” the document alleges.
Gullion resigned in April, but not before demanding $1.5 million in cash and Microtracks stock, the counterclaim says.
“With Gullion out, and competent financial management in place,” the counterclaims says, Wildlife Partners “returned to profitability within a few month of (his) resignation,” the document adds.
Wildlife Partners and the Gilroys are suing Gullion for unspecified monetary damages, raising such claims as fraud, breach of contract, breach of fiduciary duty and unjust enrichment.