Mike Kortas

Apache is functioning normally

NEXA Mortgage has sued its former president, Mat Grella, for allegedly causing the failure of a hangar-office property purchase, acting to defame the firm and his partner Mike Kortas, illegally changing corporate documents, and keeping two company cars after his termination. In response, Grella said that the allegations are a “manipulation of the truth.”

The lawsuit was filed April 29 in the Arizona Superior Court of Maricopa County. It accuses Grella and his wife, Sheridan Murray-Grella, of breaching contractual and fiduciary duties, tortious interference with business expectancies, actual fraud and defamation by false light, among other claims. 

NEXA was founded in Arizona in 2017 by Kortas and Grella after they left Equity Prime Mortgage. The firm became the largest U.S. mortgage brokerage firm, with 2,477 licensed loan officers and 236 active branches as of Monday, per the Nationwide Multistate Licensing System (NMLS).

Grella was terminated from NEXA in March amid negotiations of a buyout and a lawsuit accusing Kortas of making aircraft-related purchases with company money without his consent. Kortas denies his former partner’s allegations.

The lawsuit filed by NEXA against Grella states that in March 2024, NEXA entered into a letter of intent to purchase a five-acre airplane hangar leasehold in Mesa, Arizona, for $23.95 million. The leasehold included 75,000 square feet of existing hangar and office space.

According to NEXA, the purchase would allow the company to have a “physical home base“ — which it’s currently lacking — where it could host events and save $500,000 a year on other venues. It would also consolidate company aircraft into one space and potentially increase income through renting aircraft space to others. 

​​NEXA leases aircraft hangar space, and it owns and operates a charter company, which generates revenue from charter flights and offers tax advantages for aircraft ownership, per the lawsuit. The company said that Grella was fully informed and had authorized these moves. 

According to the lawsuit, Grella sent messages to the hangar’s broker, seller and title company that were “disparaging, knowingly untrue,“ stating that NEXA was not authorized to purchase the property. This caused the transaction to fail and harmed the company, NEXA alleges. 

Grella told HousingWire that the purchase “doesn’t fit the needs of NEXA“ as the brokerage firm focuses on mortgages. Grella added that NEXA “started growing exponentially as a remote company,“ meaning it does not need an office space. Also, he had not acknowledged or consented to the transaction that he believed would “almost entirely deplete the firm’s cash account.“

In a message to HousingWire, James Brody, a senior partner at Garris Horn LLP and attorney for NEXA, said that it’s important to ask “whether there could have been concern that monies might get tied up that would potentially affect monies available for the buyout, which in my opinion was the true catalyst for the disputes at issue.“ 

Still, “at the end of the day, we are hopeful that the parties can find a way to amicably resolve these disputes,“ Brody said.

Other allegations

The NEXA complaint also discusses the brokerage firm’s ownership structure. NEXA’s lawsuit states that, per the company’s operating agreement signed in 2019, Kortas is its sole manager, with a 50.5% ownership stake, followed by Grella’s 49.5% stake. 

But on March 22, Grella reportedly submitted documents to the Arizona Corporation Commission stating that he was NEXA’s “new manager,“ including only his signature. NEXA, which attached the document to the lawsuit, said Grella “attempted to usurp the manager’s powers.“  

Grella, in his complaint against Kortas, said his partner converted NEXA funds and made unauthorized credit card purchases, which have reduced Kortas’ ownership percentage to below that of Grella’s, such that Grella is “now the majority owner of Nexa.“ In addition, the complaint states that he added his name as co-manager and did not change Kortas’ manager status from the documents. 

Brody said a change of manager or the addition of a co-manager would have required a vote of members, and since there was no such vote, “it’s difficult to understand how any such filing by Grella with the Arizona Corp. Commission was not done improperly.“

The company’s lawsuit states that, “On account of Grella’s actions in causing harm to the company and his impending buyout, he was terminated from the employment of NEXA.“   

According to the NEXA complaint, Grella required documents after his termination that only employees could access. He also “contacted different states’ licensing departments with claims that NEXA is operating without a qualified individual for mortgage license,“ which the company said is untrue. 

Grella said he contacted NEXA employees and state regulatory agencies to update his status as a former employee, since NEXA had not updated it by March 23. He has “never harmed or sought to harm NEXA, and hopes to see the company run effectively in the near future, for the sake of all of NEXA’s stakeholders.“

Brody said NEXA did not terminate the relationships in NMLS regarding Grella’s ownership, which would have been improper, as “many states require the registration of owners in the NMLS, even if they are not employees.“

NEXA is also accusing Grella of selling a Cadillac Escalade in 2022 without authorization. The company bought the car in 2019 for $76,500 as an exclusive benefit to the owners while they were company employees. But “Grella kept or otherwise diverted the funds received for the trade,“ the lawsuit states. The company also seeks the return of a 2019 Nissan GT-R bought for company purposes for $104,490.50. 

Grella said the company’s vehicles were kept at the partners’ residences, with Kortas having two other company cars. Early in the buyout negotiations, however, the partners agreed to keep the vehicles in their possession. “Kortas was to keep the Maserati and the Range Rover, and I, the Escalade and the Nissan GTR. I remain an owner of approximately half of NEXA and its assets,“ Grella said.

According to Brody, the company understands that the vehicles were intended for use during the partners’ tenures as NEXA employees, which was the case for Grella early in the buyout negotiations. 

In the lawsuit, NEXA asks, among other things, for an injunction against Grella, ordering that he cease any further public statements about NEXA or Kortas. 

Source: housingwire.com

Apache is functioning normally

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.”

Source: housingwire.com