7 months ago
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Former NEXA Mortgage president Mat Grella has accused his partner at the firm, Mike Kortas, of making aircraft-related purchases with company money without his consent, resulting in his “abrupt” termination from the company. Kortas denies his partner’s allegations.
“I had grown frustrated with our partnership, coupled with Mike’s fixation on aircraft-related purchases. I had some concerns about where our focus was because it had shifted away from mortgages and more on aviation. I brought my concerns to Mike and it became evident that my concerns were not being handled productively,” Grella said in an interview.
As a result, Grella started conversations related to a buyout in November, he told HousingWire. However, during the company’s valuation process, when financial professionals reviewed its books, discoveries of aviation purchases led him to confront Kortas, resulting in his termination as president of NEXA, Grella added.
“Early this year, I discovered that Kortas had been making aircraft-related purchases with company money and without my knowledge or consent,” Grella said in a statement. “When Kortas entered into a letter of intent for NEXA’s purchase of a $24 million airplane-hangar leasehold, I objected in the interest of protecting the company. The situation escalated, resulting in my termination.”
In response, Kortas wrote to HousingWire that the only portion of Grella’s most recent statement that “appears to be accurate is his handling of NEXA’s day-to-day operations, which mainly included financial aspects.”
Kortas added that Grella was notified of his “impending termination’ a number of days prior and was “directly related to his tortious and intentional interference with NEXA’s business and, which was done in breach of his fiduciary duties.”
“In November 2023, Mr. Grella requested and agreed with NEXA to a buyout of his membership interest in NEXA and its subsidiary companies, which include the ongoing aviation business that Mr. Grella was also approved of which NEXA currently leases an aircraft hangar ,” Kortas said. “As such, Mr. Grella’s claims that NEXA has done things without his knowledge and consent are especially troubling and not credible.”
Grella filed a complaint against Kortas and his wife, Edna Montijo, in Maricopa County (Arizona) on March 19.
In total, Grella claims he discovered over $1.5 million worth of “secret, unauthorized” aircraft purchases and jet hangar lease payments – “and all of which Kortas purchased for himself or his wholly owned entities.”
The document claims breach of the operating agreement, breach of fiduciary duties, unjust enrichment, and conversion, among others allegations. It says Kortas’s “misconduct also supports his removal from the company as a member.”
Grella is asking for attorney fees and punitive damages. He also claims that Kortas converted NEXA funds and made unauthorized credit card purchases, which “have reduced Kortas’ membership percentage interest to below Grella’s membership percentage interest, such that Grella is now the majority owner of Nexa.”
The lawsuit states that Kortas had 50.5% of the company and Grella had a 49.5% share.
NEXA’s businesses
America’s largest mortgage brokerage, NEXA originated $6.29 billion in mortgage loans in 2023, according to Kortas. As of Monday, the company had 2,391 sponsored mortgage loan officers, per the Nationwide Multistate Licensing System (NMLS).
Grella told HousingWire that the mortgage business is profitable despite a challenging market. But that’s not the case for the aviation business. NEXA’s affiliated companies include AXEN Mortgage, a non-delegated correspondent shop, as well as a charter flight business – the latter of which was the source of disagreement between the partners.
The venture started in February 2022 when Kortas “persuaded” Grella to purchase two jets for NEXA’s corporate use and business purposes, per the lawsuit. The jets would be used to fly executives around the country as needed. However, there were also tax benefits to depreciating those assets, which would justify the investment. Another jet acquisition was made one month later.
Then, according to the lawsuit, in late 2022, Kortas “convinced” Grella to acquire an FAA-licensed charter company called Fly Dreams, LLC. The justification was that it would help charter the third jet and “dry-lease it, which would help defray NEXA’s aircraft expenses.”
“After NEXA closed on the purchase of Fly Dreams in early 2023, due to regulatory hurdles that Kortas had failed to flag or explain, NEXA was unable to charter the new jet with Fly Dreams,” the lawsuit states.
After that, specifically in 2023, Grella said Kortas tried to convince him to purchase an airplane flight school due to a pilot shortage (which he ended up doing independently), invest in an aircraft hangar, and purchase another jet.
Grella refused and claimed he faced retaliation, with Kortas treating him as an employee rather than a partner, depriving him of the use of the jets, and ceasing the payment of wage for both of them despite NEXA having millions in retained earnings.
Regarding the $24 million airplane-hangar leasehold, the lawsuit that “Grella informed the seller of the truth of Kortas’ inability to bind Nexa.” Then, through his legal counsel, Kortas “asserted that the aviation business is a legitimate business of Nexa and “Grella had consented to some aviation related purchases.” Therefore, according to Kortas, he was authorized to make the purchase on Nexa’s behalf without Grella’s consent, per the lawsuit.
The split
According to Grella, his “abrupt” termination occurred on March 20, after months of frustration related to what he calls a “serious breach of NEXA’s operating agreement, which requires profits to be distributed equally and for both partners to consent to activities not directly related to NEXA’s mortgage brokerage purposes.”
The lawsuit states that Kortas controls the company, bank accounts, and profit distributions. However, the operating agreement says that if the company engages in any other activity that is unrelated to the purpose of mortgage brokerage, it “requires unanimous member consent.”
“But after Kortas developed an aviation hobby, he began spending millions of dollars of company money for his own aircraft, without Grella’s consent, and, in many cases, without his knowledge,” the document states.
Grella, who started the business with Kortas in 2017 after leaving Equity Prime Mortgage, was responsible for handling the operations, including managing relationships with partners and lenders, overseeing production and supporting loan officers and the management team.
Kortas announced during a weekly Town Hall on Tuesday that Grella had been terminated. This means he will not be involved in the company’s daily operations or strategic decisions for the growth of the business. However, he remains a partner until the conclusion of a buyout negotiation.
According to Kortas, the buyout depends on NEXA’s appraisal. Despite his sadness at hearing what he called Grella’s “harmful rhetoric,” Grella appears to be motivated more by his unhappiness with the terms of his agreed-upon buyout than by concerns he claims to have about the related airplane business, Kortas added.
“Of course, Mr. Grella’s ongoing interference with NEXA’s business relationships and expectancies, which appears to be a blatant effort to pressure NEXA into relenting on those contractual rights that Mr. Grella is actually upset about, are doing nothing but causing the type of harm… harm that is irreparable in nature … that Mr. Grella professes to be taking issue with.”
“NEXA will not be bullied or blackmailed into foregoing its legal rights by a former employee who had himself already agreed to no longer be an owner of NEXA.”
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