"Chu "defrauded Tricolor by using corporate funds to pay for lavish personal expenses and by forcing the company into paying him tens of millions of dollars in bonuses (on top of his executive salary)," trustee Anne Burns said in a court filing last week. That compensation was "premised on his ability to deliver exceptional financial results - results that were the product of the fraud." The payments helped finance what the trustee described as an extravagant lifestyle, including luxury homes in Dallas, Beverly Hills and Miami"
"Many of the allegations that have been made against Mr. Chu in recent days are inaccurate and seriously misguided, as will be clear when the real facts come out," Matthew Schwartz, an attorney for Chu, said in a statement. "We look forward to a full and fair hearing in the courtroom." US prosecutors charged Chu and the company's former chief operating officer last week with running Tricolor through "systemic fraud." Two other former executives have pleaded guilty to fraud charges."
The trustee overseeing Tricolor's liquidation alleges founder Daniel Chu extracted nearly $30 million in compensation by using corporate funds to pay lavish personal expenses and forcing large bonuses. The trustee says those payments were tied to purported financial results that were the product of fraud. Corporate funds allegedly financed luxury homes in Dallas, Beverly Hills and Miami, private-jet travel, European vacations, medical and dining expenses, and other personal charges on a business AmEx card. U.S. prosecutors charged Chu and the former COO with running Tricolor through systemic fraud, while two other executives pleaded guilty. Chu's attorney denies the allegations and seeks a courtroom hearing.
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