Bankruptcy trustee sues former Xceligent executives

November 5, 2019 | By James Dornbrook | Kansas City Business Journal

The bankruptcy trustee for Xceligent Inc. accuses four of the Blue Springs company's former executives of stealing trade secrets, customer lists, potential customer lists, employee lists and other assets from the company and attempting to profit from it.

The lawsuit was filed in Delaware bankruptcy court against Xceligent founder and former CEO Doug Curry; his wife and former Chief Human Resources Officer Erin Curry; former Chief Research Officer Nathan Lipowicz; and Dawn Harpster, who worked as a liaison for Xceligent with offshore contractors, which face charges related to stealing content to populate Xceligent's database.

The defendants could not be located for comment. The defense has not filed an answer to the complaint, which was filed Oct. 23. The lawsuit does not list a defense attorney.

Trustee Alfred Giuliano seeks to subordinate any of the defendants' creditor claims in the Xceligent bankruptcy. He also seeks an order for the defendants to return any Xceligent property.

Defendants "are in possession, custody, or control of property of Xceligent's estate that they used to launch the business of new corporations to compete with Xceligent, including trade secrets, customer lists, potential customer lists, employee lists, and other assets or attempted to sell to third parties," the trustee wrote in the lawsuit.

According to the lawsuit, immediately after being fired at Xceligent in October 2017, Doug and Erin Curry started a competing firm called Intrepid CRE; however, they walked away from it after Xceligent wrote a cease-and-desist letter in January 2018. Three months later, Doug Curry created a commercial real estate entity named Empirical CRE, naming himself as CEO and employing his wife, Lipowicz and at least four other former high-level employees or executives of Xceligent.

An attempt to contact Doug and Erin Curry through the website was unsuccessful.

The Xceligent trustee accused Empirical CRE of using its stolen property to launch the business. The trustee also accused Harpster of attempting to sell data belonging to Xceligent in the Philippines, a nation where Empirical is contracting to gather data for its platform.

The lawsuit also outlines a slew of accusations against the former Xceligent executives, claiming they knowingly perpetrated and participated in a scheme to steal data from competitors to populate the Xceligent platform. Then when the alleged scheme was discovered, Doug Curry embarked upon a "scortched Earth" legal defense, including helping an overseas contractor defend itself from infringement and hacking claims.

"Even as Xceligent was hemorrhaging money, and despite the publicity about (Philippine contractor) Avion's involvement in (child) trafficking, the Currys diverted Xceligent's scarce resources to retain and pay for Avion's shadow counsel in the Philippines," the lawsuit stated. "It was those highly paid, Xceligent-funded lawyers who drove the legal strategy for defending the lawsuits against Avion."

The lawsuit also accuses the Currys of rampant nepotism and living lives of excess as the company fell apart around them.

"Doug continued to draw at least $350,000 in base salary (plus bonuses and other benefits)," the lawsuit states. "The Currys proceeded to hire their own family members

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