Lawsuit against councilor over alleged negligence dismissed with settlement agreement

A lawsuit against City Councilor Blake Ewing alleging he acted fraudulently and negligently in managing The Max Retropub, an 80s-themed Tulsa bar, was dismissed Wednesday.

The dismissal came following a settlement agreement between the plaintiff investors of The Max Retropub, Ewing and his other entities, plaintiff Mark Perkins said Thursday.

“Under the terms of the settlement, Mr. Ewing agreed to fully divest himself of his ownership interest in The Max Retropub and resign as its manager,” Perkins said in a statement.

“The business of the Max will go forward unabated, and the remaining partners and staff are fully committed to creating an exceptional experience for our customers.”

Ewing declined to comment Thursday on the case’s dismissal.

The lawsuit, which was dismissed without prejudice and filed in October 2016, accused Ewing of fraudulently transferring more than $300,000 out of the business to fund his other businesses. The following day, Ewing posted a lengthy statement on Facebook, stating he tried to work through the investors’ concerns prior to the suit being filed.

The suit’s settlement has been pending since late last year. In December 2016, Perkins told The Frontier parties signed a settlement agreement containing several conditions that when fulfilled would result in the dismissal of the lawsuit.

The lawsuit was the second by a group of investors or business partners to claim that Ewing siphoned money away from the business and spent it on his other businesses. Another group of investors who planned to open a downtown grocery store with Ewing as its manager made similar claims in a 2014 lawsuit.

Ewing settled that suit and it was dismissed.

The suit filed last year sought to have Ewing terminated as manager of the 80s-themed bar, a request investors had made several times before.

In July 2016, Perkins and other members of the board of directors met with Rob Durbin, attorney for Ewing and The Max, to discuss issues facing the business, the suit states. During that meeting, board members voted unanimously to request Ewing resign as manager, the lawsuit states. However, Durbin backed Ewing as manager.

The following month, Perkins emailed Durbin on behalf of members of the board of directors, again calling for Ewing’s termination as manager, the lawsuit states.

“If you think it is in the best interest of the company to continue forward with a manager who has, without question, misappropriated company funds and created a situation where the Tax Commission is filing liens and garnishments against our business … a bar that finds itself without general liability insurance, and a tenant that pays its rent, please advise us as to why it is in The Max’s best interest to continue with the same manager,” Perkins’ email said.

On Aug. 16, and again a few days later, Perkins wrote Durbin requesting Ewing’s removal, as well as recovery of the bar’s misappropriated funds. Durbin responded by saying he didn’t think he should discuss the matters as The Max’s attorney.

However, on Aug. 31, Durbin and Ewing attended a settlement meeting in Perkins’ office, the lawsuit states. At the meeting “it became clear that Ewing, Durbin and The Max would oppose any claims that were brought by unit holders.”

The lawsuit also accused Ewing of “massive acts of malfeasance and misappropriation” by using The Max’s generated funds to pay expenses for his other businesses — Joe Momma’s Pizza, The Fur Shop and The Phoenix — through a company called The Engine Room LLC. Some payments to Joe Momma’s Pizza occurred after the restaurant was closed due to a fire last year, the suit alleges.

Ewing transferred more than $300,000 to The Engine Room from 2010 through 2015, the suit claims.

In addition to propping up Ewing’s other businesses, funds from The Max also went for the city councilor’s personal use, the lawsuit alleges.

The charges include “various restaurants, gas stations, furniture stores, baseball games, bars, hotels, airlines, veterinary clinics, musical instrument stores, bicycle shops, bookstores, consumer electronics stores, auto mechanics, flower shops, fast food chains, movie theaters, yacht clubs, skate shops, and other businesses.”

The lawsuit’s allegations weren’t the first controversies Ewing has faced with his businesses. Ewing had a pattern in which he borrowed heavily to open multiple businesses at the same time, clashed with investors seeking financial information and his businesses failed to pay state sales and beverage taxes already collected, a 2016 investigation by The Frontier and NewsOn6 found.

Over the past two years, Joe Momma’s Pizza investors repeatedly asked Ewing for financial accountability and questioned what happened to insurance proceeds after the fire last year, according to emails obtained by The Frontier.

Four businesses in which Ewing had ownership — Legend’s Dance Hall, The Max, The Fur Shop and The Phoenix Cafe — failed to pay the state more than $140,000 in sales and beverage taxes collected since 2010, records show.

Ziva Branstetter contributed to this story.