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Former Charlotte Mayor Anthony Foxx seeks dismissal of claims over DesignLine work

Former Charlotte Mayor Anthony Foxx has asked a bankruptcy court judge to dismiss a lawsuit that attempts to recover compensation he received from his former employer, defunct bus maker DesignLine. In his current role as U.S. transportation secretary, he was in Charlotte recently to announce a $25 million grant.
Former Charlotte Mayor Anthony Foxx has asked a bankruptcy court judge to dismiss a lawsuit that attempts to recover compensation he received from his former employer, defunct bus maker DesignLine. In his current role as U.S. transportation secretary, he was in Charlotte recently to announce a $25 million grant. ogaines@charlotteobserver.com

Former Charlotte Mayor Anthony Foxx has asked a U.S. bankruptcy court judge to dismiss claims against him in a lawsuit that attempts to recover pay he received from his former employer, defunct bus maker DesignLine.

A trustee overseeing the liquidation of the Charlotte firm filed a suit in August seeking the return of almost $421,000. The suit alleged Foxx received the compensation despite doing little to no work for his former employer.

In a court filing last week, Foxx denied that he received nearly $421,000 in salary and overtime during four years at DesignLine, as alleged by trustee Elaine Rudisill. The filing does not say how much Foxx made, but it says the trustee’s complaint was based on “inaccurate” records and that he never received overtime pay.

Foxx now serves in President Barack Obama’s Cabinet as U.S. secretary of transportation. He was appointed to the post in 2013. Before becoming a Cabinet secretary, Foxx spent four years at DesignLine as deputy general counsel.

The trustee’s complaint alleged that Foxx did little to no work for DesignLine and spent little time at the office.

Foxx’s filing said he provided legal services to the company “upon being assigned such work, including corporate governance, employment law and regulatory matters.” Given his part-time job as mayor of Charlotte, “management knew and expected that his physical presence at its headquarters would be limited and that he would handle projects on an ‘as assigned’ basis,” the filing states.

The filing also says Foxx had previously developed a reputation as a leader in mass transportation as a member of the Charlotte City Council, and that DesignLine’s management recognized his hiring would enhance the company’s reputation.

“While not specifically part of his job description, the company valued Mr. Foxx’s perspective of national and regional transportation policy and how the company might better position itself in its targeted markets,” the filing states. “Mr. Foxx provided such support, as and when requested, consistent with ethics guidance provided to him by the Charlotte City Attorney.”

Foxx, in the filing, denied the company received less service than it paid him for and said he was actually paid less than he and the company had “bargained for.” In 2010, for example, his pay was cut by more than 25 percent to help the company reduce expenses, the filing states.

Foxx’s filing, which was a response to the trustee’s suit, asks the court to dismiss the claims and pay for attorney’s fees.

A group led by retired Air Force Gen. Buster Glosson and his son, Brad, bought DesignLine in 2006 and moved it to Charlotte from New Zealand. After struggling financially for years, the company filed for bankruptcy in 2013, costing investors millions and leading to layoffs for a workforce that once reached 250.

As part of the bankruptcy proceedings, Rudisill, the trustee, has been filing “adversarial proceedings” against various defendants, including Foxx, in an attempt to recover more money for the bankruptcy estate.

In August, Rudisill also filed a wide-ranging suit against the Glossons and other former company officials, alleging fraud, violations of racketeering statutes and breaches of fiduciary duty. The defendants have said the claims are baseless and in September filed a motion to dismiss that suit.

Rick Rothacker: 704-358-5170, @rickrothacker

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