CHARLOTTE, N.C. _ A lawsuit alleging U.S. Transportation Secretary Anthony Foxx performed little to no work in a past job at defunct Charlotte bus maker DesignLine is heading to mediation.
The parties in the case have agreed to participate in a voluntary, non-binding mediation in Charlotte that will occur on or before Sept. 30, according to an order filed in federal bankruptcy court this month.
By no later than Oct. 14, the parties will hold a status conference to report that the matter is settled or to agree on a schedule for moving forward, according to the order. Mediation is a fairly common step in these types of court cases.
In August 2015, the trustee liquidating DesignLine filed suit against Foxx seeking the return of the pay he received as the company's deputy general counsel from 2009 to 2013. The complaint said company documents showed little to no work by the former Charlotte mayor, who joined President Barack Obama's Cabinet in July 2013.
In a response filed in April, however, Foxx said records provided by trustee Elaine Rudisill contradicted those claims. These records showed "activities and actions" by Foxx as deputy general counsel, as well as interactions with the company's outside law firms, according to the filing.
Foxx had sought to have the case dismissed, but in May U.S. Bankruptcy Judge Craig Whitley denied that motion, allowing the case to move forward into the discovery stage. That phase, in which lawyers for the plaintiffs and defendants exchange evidence before a potential trial, is now on hold awaiting the outcome of the mediation session.
Foxx's attorney, Ross Fulton, declined to comment. An attorney for Rudisill did not immediately respond to a request for comment.
As part of DesignLine's bankruptcy proceedings, Rudisill has been filing "adversarial proceedings" against various defendants, including Foxx, in an attempt to recover more money for the bankruptcy estate.
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.
The central issue in the Foxx case is the amount of work he performed during his DesignLine tenure. In a court filing, Rudisill has said the company "received very little, if any, value from Foxx, let alone reasonably equivalent value."
The filing included emails between Foxx and top executives at the company showing frustration with his responsiveness.
At the May hearing, however, Foxx's attorney, Ross Fulton, recounted emails detailing numerous instances where Foxx did work on behalf of the company, including meeting with top executives, interacting with outside counsel and reaching out to other cities interested in DesignLine buses.
The trustee's original complaint said he received about $421,000 from DesignLine, but Foxx said in a filing in April that records indicated a gross salary of $309,760 over a 3 {-year period. Rudisill's attorney said in the hearing that the lower figure was correct.
Rudisill has also filed suit against former leaders of DesignLine, including Buster and Brad Glosson, alleging that they committed fraud against the company's creditors and investors. Whitley last month denied a motion to dismiss that lawsuit. The Glossons and others named in the suit have denied the allegations.
