The former CEO of the technology startup named in Ken Paxton’s indictments is suing the company he founded for costs associated with the attorney general’s criminal investigation and ongoing legal battle.
William Mapp III, the founder and ex-CEO of McKinney tech firm Servergy Inc., says he “incurred and continues to incur attorney’s fees and expenses and may in the future incur other liabilities” from “grand jury proceedings and criminal indictment of Texas Attorney General Ken Paxton.”
Mapp also claims to have shouldered costs associated with an ongoing U.S. Securities and Exchange investigation into whether the company defrauded investors when he was CEO. Mapp is asking for more than $150,000, plus damages from Servergy for expenses he already has incurred and anticipates as Paxton’s court battle continues.
“It is routine for corporations to agree to advance and reimburse current and former officers and directors for legal fees in such circumstances, and Servergy is obligated through its bylaws to do so in this case,” said Kirby J. Smith, Mapp’s attorney. “Servergy has so far failed or refused to do so, leading to Mr. Mapp’s conclusion he had no choice but to file this lawsuit to obtain payments overdue to him.”
The SEC began investigating Servergy in 2013, and after the company failed to produce information demanded in multiple subpoenas, it sued in December 2014, to compel the production of records in an investigation of “possible misstatements and omissions related to Servergy’s purported business relationships and technology.”
At the same time, a group of investors, including House State Affairs Committee Chairman Byron Cook, R-Corsicana, also sued the company for access to Servergy’s books and records. Both suits ultimately were dropped after the documents were produced, but Mapp’s lawsuit suggests the SEC investigation is ongoing.
“Mapp has incurred and continues to incur attorneys’ fees and expenses and may in the future incur other liabilities in connection with the investigation of Servergy by the Securities and Exchange Commission,” the lawsuit reads. “Mapp has retained the law firm of Greenberg Traurig to aid in his defense of the SEC investigation.”
See here, here, and here for more on Servergy and William Mapp, who testified during the grand jury proceedings but has some potential credibility issues. His lawsuit was filed in Nevada, as that is where Servergy is incorporated, though its corporate office is here. I have no idea what if any effect this will have on the criminal case against Paxton – the possibility that the SEC is still investigating Servergy is intriguing but not necessarily relevant – I just thought it was worth noting.