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Lafayette’s KnightOil Tools sufferingmore than most inenergy downturnas internal familystrife adds towoesInternal family strife adds to industrydownturn woes
By Billy Gunn [email protected] 20, 2016 - 1:37 PM
by Taboola
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Slogging through the worst
energy downturn in decades,
south Louisiana service
companies are feeling the
squeeze, but one of those
companies — family-owned and
Lafayette-based Knight Oil Tools
— is struggling more than most.
In January, Knight Oil lost its two
top executives with the
departures of Earl Blackwell and
Doug Keller. In late December, an
aircraft leasing company filed a
lawsuit against Knight Oil for
millions of dollars due to a
missed lease payment. And last
summer, employees in Texas and
Louisiana filed federal lawsuits
claiming they were cheated out
of overtime pay. The federal suits
seek to add other employees who
may be owed overtime wages.
There’s also the self-inflicted
wound caused by the company’s
former top executive, Mark
Knight, who was president, CEO
and chairman of the board when
the news broke last year that he
allegedly set up his brother
Bryan Knight for a cocaine
arrest. Mark Knight, 58, now
faces two felony racketeering
charges.
Mark Knight has since removed
himself from any official role
with the company, but how
hands-off he’s been is unknown
outside the company.
Bryan Knight, who filed suit in
federal court against his brother
and others for allegedly setting
him up for the cocaine arrest,
claims in court filings that Knight
Oil was having financial problems
and that his brother blocked
potential investors from looking
at the company’s books.
“Most recently, after it became
apparent that new capital would
be required to be infused into
Knight Oil because of Mark’s
lavish spending, mismanagement
and theft of corporate assets,
Mark Knight refused to allow
investors to conduct their due
diligence unless (Bryan Knight)
dismissed his suit against him,”
according to a December filing in
the federal lawsuit. Efforts last
week to reach Mark Knight and
Bryan Knight were unsuccessful.
It’s also unclear who is running
the company now. Blackwell, a
veteran of the oil industry who
joined Knight Oil in 2014 and
became its president and CEO in
January 2015, has left the
company. Blackwell last week
declined to go into specifics
about his departure or about the
company’s financial health.
“I’m not a spokesman for the
company. I really couldn’t share
anything. … I really don’t want to,
to be honest,” Blackwell said. He
referred questions to Kelley
Knight Sobiesk. Sobiesk is the
Knight brothers’ sister and
apparently has joined the
company’s management. She did
not return email messages last
week.
Blackwell did confirm that Keller,
a longtime Knight Oil executive,
also is no longer there. Keller
joined the company in 1988 and
was named president of Knight
Oil Tools International in
February 2014. Efforts to contact
Keller this past week were
unsuccessful.
Company patriarch Eddy Knight
opened the company’s first shop
in Morgan City in 1972, operating
under the name Knight
Specialties that in 1984 became
Knight Oil Tools.
Mark Knight took over as head of
Knight Oil in 2002 after the
death of his father and grew the
company into a major player on
the international stage. The
Knight Oil website lists
operations in 11 U.S. states and in
international locations from
Colombia to Chile, Russia to
India and North Africa to
Madagascar.
That role officially ended in April
2015, when Mark Knight was
arrested along with two law
enforcement officers and a
Knight employee for allegedly
framing Bryan Knight in a May
2014 drug arrest. Mark Knight
was indicted on two counts of
racketeering in August. The next
court hearing in the case is set
for Feb. 25. No trial date has been
set. If convicted, Mark Knight
faces five to 50 years in prison
and a fine up to $1 million on
each of the two charges against
him.
Knight Oil remains a privately
held company; there are no
statements available for public
inspection of revenue, cash flow
and other measures of financial
health.
There are, however, other
indications of financial problems.
According to a lawsuit filed in
state district court in Lafayette,
Path Air LLC is suing Knight Oil
Tools Inc. and some of the
company’s subsidiaries for
breaking the terms of a lease
initiated in 2007 lease for a
Bombardier Challenger 300 jet.
The lawsuit, along with demand
letters from the jet company’s
attorneys, claims Knight Oil was
more than 10 days late on a
$149,284 monthly lease payment
that had been due Oct. 1. The late
payment and the fact that Knight
Oil did not return the aircraft to
its owners, threw the lease into
default, the suit claims. Path Air
is suing for “stipulated loss value”
of $19.6 million and another
$363,215 in unpaid rent, unpaid
sales taxes and unpaid property
taxes. Path Air filed the lawsuit
Dec. 28. On Dec. 3, Knight Oil
removed the jet from the
company hangar at Lafayette
Regional Airport and returned it
to its owner.
The company also is fighting
federal court claims by ex-
employees in Louisiana and
Texas that Knight Oil did not
properly pay them overtime.
Both lawsuits seek to add other
Knight Oil employees who
believe they were improperly
denied overtime pay.
In July, former employee Rusty
Provost filed a suit in Lafayette
U.S. District Court claiming
Knight Oil told him he was being
promoted from shop hand in the
company’s fishing tools division
to dispatcher. As a shop hand,
Provost was paid an hourly wage
and was due overtime pay for
any time worked over 40 hours
per week. Provost’s attorney,
Kenneth St. Pé, said in court
papers that after Provost was
reclassified as a dispatcher, he
was paid a salary that did not
include extra pay for hours over
40 worked each week even
though he regularly put in 70 or
more hours each week. St. Pé
also said the promotion to
dispatcher also was fiction.
“Despite his title as ‘Dispatcher,’
(Provost) never dispatched and
instead his job duties consisted
primarily of operating a forklift,
cleaning and painting tools,
answering the phone and
monitoring security cameras
during the night and weekends,”
St. Pé wrote.
Answering Provost’s lawsuit,
Knight Oil attorney Gregory
Guidry denied much of the
claims and said the company had
complied with the rules of the
federal Fair Labor Standards Act.
In Corpus Christi, Texas, U.S.
District Court, former Knight Oil
employee Marcos Montemayor
filed a similar complaint eight
days after Provost’s suit was
filed. It alleges much of the same
— that Knight Oil improperly
classified Montemayor as an
exempt, or salaried, employee
even though he and other like-
classified employees performed
the tasks of hourly workers.
Michael Josephson,
Montemayor’s attorney, claimed
his client’s work week often
consisted of 84 hour work weeks
without time-and-a-half pay for
working beyond 40 hours in a
week.
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