05/01/2013 11:53 am ET Updated May 01, 2013

William Koch, Billionaire Brother, Must Face Lawsuit Alleging Exec's False Imprisonment: Judge

A federal judge this week batted down billionaire William Koch's effort to have a lawsuit by former employee Kirby Martensen dismissed, Bloomberg reports, meaning that the energy mogul will now have to defend himself against claims that he falsely imprisoned Martensen at a remote ranch in Colorado.

"We welcome the opportunity to bring this case in front of a jury, and we'll see who the jury wants to believe," John Houston Scott, Martensen’s attorney, told Bloomberg.

U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco had dismissed earlier claims from Martensen, former senior vice president of Koch's Oxbow Carbon & Minerals International, giving him a chance to amend his suit to clarify why it could legally be brought in California. Martensen did and refiled the suit.

The case revolves around Martensen's allegation that Koch lured him and other Oxbow employees last year to a secluded property, where he was imprisoned and interrogated for a period of time before being fired. Martensen also claims that he was guarded by a local sheriff who wouldn't allow him to leave to catch his scheduled flight. He alleges that a guard -- who he suspected was armed -- escorted him home to San Francisco on a private plane from a local airport.

According to Bloomberg, Corley held this week that although Martensen's amended suit doesn't allege that Koch "directly participated in the false imprisonment," it "includes facts that support an inference that the persons who did" were acting as Koch's agents.

In Martensen's initial lawsuit, he claimed the episode was prompted by an anonymous letter that had accused him of mismanaging and stealing from Oxbow. He also contended that other company executives had read his private communications without his knowledge and discovered that Martensen had deep reservations about the legality of the company's tax avoidance strategies, which allegedly involved moving operations overseas to Asia so that Oxbow could avoid paying U.S. taxes on some $200 million in profits.

Koch and his representatives have admitted investigating Martensen, claiming that their probe turned up proof that he was "participating in a wide-ranging scheme to defraud, accepting bribes and diverting business from our company." Martensen is currently being sued by Oxbow on those allegations in Florida, and the company has argued that his suit was filed in retaliation.



Donors Giving $500,000-Plus To Super PACs