CHARLESTON – A man is suing two other men and their business, claiming he invested money in the business and was promised a stake, but was then pushed out of the equation.

William J. Phillips filed a lawsuit in Kanawha Circuit Court Feb. 27 against Paul A. Beachum, Michael Abshire and Mountain State Wireline LLC.

Phillips said he started meeting with the defendants in late 2006 to discuss the possibility of creating a business in West Virginia as an oil and gas service.

According to the complaint, the defendants, particularly Beachum, told Phillips that they had the expertise to conduct such business and asked Phillips if he could invest some money in order to buy equipment and make sure the business was properly capitalized.

The defendants then allegedly told Phillips they would not take a salary or start paying back the loan until the business started turning a profit. The complaint says the defendants signed a resolution stating those terms.

Phillips was also promised that he would be an equal partner in the business and have an equal hand at decision making, the complaint says.

Phillips says he agreed and loaned the defendants more than $500,000. The parties then formed the Mountain State Wireline LLC.

Phillips claims that soon after the business was formed, the defendants started running it in "their own self interest, contrary to the terms of the resolution.

The defendants began denying Phillips access to the books and records of the business and wouldn't allow him to participate in the day to day affairs of running the business, the complaint says.

Phillips believes that the defendants' plan all along was to obtain the loan from him, then eventually cut him out.

The complaint says that once the defendants had the loan and the business up and running, they hired a lawyer that drafted an employment agreement for Phillips that allowed them to get rid of Phillips by a vote in October 2007.

Phillips said the vote came at a time when his actual share of the business was zero because it had not yet turned a profit.

He's seeking compensatory and punitive damages, plus legal interest and costs.

Timothy J. LaFon is representing Phillips. The case is before Kanawha Circuit Judge Charlie King.

Kanawha Circuit Court case number: 09-C-348

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