By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
One month after he was sacked as the president and chief executive officer of Performance Nutrition Inc., Gary Lewellyn has filed a $30-million lawsuit in state court against employees and investors of the company he founded.
In the suit, Lewellyn contends that the group is responsible for fraudulently ousting him on August 29 from his position at the food-supplement company. Lewellyn alleges that the group did so by conspiring to commit fraud and slander against him and his wife, Tamra Halling, who had been the company's corporate secretary.
David Wynne, the new corporate secretary for Performance Nutrition who is named in the Lewellyn suit, says: "The allegations are without merit."
The company, which uses television infomercials to market its powdered food-supplements, has been in turmoil since the Dallas Observer reported on Lewellyn's shady past in a June 27 cover story, "Hot product: World-class embezzler Gary Lewellyn rebounds with fast-selling treatment of A.D.D." The article detailed Lewellyn's conviction in 1982 for embezzling some $16 million from a bank in Iowa chaired by his father.
In August, Performance Nutrition issued a press release announcing that Lewellyn and his wife had been removed from their jobs. The release cited the Observer article, as well as alleged discrepancies in recent company financial statements, as the grounds for Lewellyn's removal. A week later, the company filed suit in state court alleging that Lewellyn and his wife had breached fiduciary duties and diverted corporate assets.
This past week, the company issued a release stating that "a preliminary review of the company's accounting records" indicates that revenues "have been substantially overstated" for the past 19 months. The company had hired Ernst & Young, the public accounting firm, to assist in an investigation, the statement said.
In his suit, Lewellyn alleges that on August 29, 1996, he was literally thrown out of his office--an event that caused "immense emotional distress, pain, suffering, and anguish" to Lewellyn and his wife.
On that day, Lewellyn's suit alleges, investors James and Joseph Kennedy, who are principals in Kennedy Capital Management Inc., a St. Louis firm that had a stake in Performance Nutrition, entered the company's Carrollton offices with two unknown men. By using "threat, intimidation, assault, and by claiming to possess legal authority," Lewellyn contends, the Kennedys forced him and his wife to abandon their offices, and seized their papers and a 1992 Lincoln automobile.