Dive Brief:
- Mountain Express Oil’s bankruptcy trustee was unable to reach a settlement in recent weeks with the defunct retailer’s former co-CEOs over their alleged misconduct while leading the company, according to filings with the U.S. District Court for the Northern District of Georgia, Atlanta Division.
- The lawsuits against Lamar Frady and Turjo Wadud and related entities aim to claw back as much money as possible for Mountain Express’ creditors amid allegations that the executives siphoned millions of dollars away from the company.
- The failure to reach an agreement comes over three months after the court revealed it would oversee a mediation with the goal of reaching a settlement.
Dive Insight:
Shortly after the court accused Frady and Wadud of misappropriating hundreds of millions of dollars in March 2025 — two years after Mountain Express first went bankrupt — three former Mountain Express financial execs testified that they witnessed the two siphon money during the company’s rapid sale-leaseback spree between 2020 and 2023.
Signs that the litigation against Frady and Wadud may be nearing an end emerged when the court said in March that it was looking to reach a settlement. In a message to C-Store Dive that month, U.S. Bankruptcy Judge Mary Grace Diehl, who oversaw the mediation, said negotiations would begin on May 21.
According to a June 16 status report, the trustee is still in talks with Frady, who “was able to make significant progress in settlement negotiations.” However, the trustee “does not believe that further negotiations are warranted” with Wadud, whose “settlement discussions have indisputably ended,” according to the report.
“It is unclear whether the claims against [Wadud] might be resolved in connection with the ongoing discussions with [Frady],” the trustee wrote in the status update.
With the mediation now over, the trustee has requested that the temporary pause on the lawsuit be lifted and that they be afforded 14 calendar days to review Frady and Wadud’s pending motion to dismiss the lawsuit, which was filed in February.
Counsel representing the trustee declined to comment when asked what the failed settlement negotiations mean for the future of the lawsuits. The attorney representing Frady and Wadud did not respond by press time when asked to comment.
