The Utah Supreme Court heard arguments Monday from a group of investors who are challenging the dismissal of a case they filed against six founding members of Lehi multilevel-marketing company XanGo LLC.
The legal issue that the justices will consider is whether 4th District Judge Fred Howard rightfully dismissed the case and correctly applied Utah Rules of Civil Procedure.
The investors, who identified themselves as Angel Investors LLC and as a "few neighbors and friends" who "pooled their savings and invested it in an unknown startup company called XanGo," filed lawsuits in 2006 and 2007 against the company, which sells juices and personal-care products.
The original court complaints are sealed, but at the court proceeding Monday, the Angel Investors’ attorney, Mary Anne Wood, said the investors "became concerned by evidence of extravagant lifestyle and compensation" of the six founders — Aaron Garrity, Bryan Davis, Gary Hollister, Gordon Morton, Joseph Morton and Kent Wood.
The investors claim XanGo paid the founding six men high salaries, paid for luxury automobiles and houses, covered family vacations and even the purchase of a piano for personal use, Wood said. When some minority investors began to question the expenditures, "XanGo’s founding members began buying minority interest from the original investors" by taking loans from XanGo, instead of the company buying back the interests, according to a brief for the Supreme Court.
1 Comment
Leave a reply
Ahhh so unfortunate when MLM execs abuse the trust that those that promote the company put in them. Hopefully the allegations are deemed as unfounded though, for the good of the company.