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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Executive Settles With Gulf Usa Whistleblower To Stop Fighting For Job In Exchange For $25,000

A Gulf USA Corp. executive who blew the whistle on alleged bankruptcy fraud schemes last fall will stop fighting for his job in exchange for $25,000.

Former chief executive officer William Purcell was scheduled to take the stand in federal bankruptcy court on Friday. But lawyers for Gulf and Purcell announced a settlement before trial began.

Purcell had been trying to get his $180,000-a-year job back. He was suspended in November after alleging that British insiders were manipulating Gulf’s bankruptcy plan at the expense of creditors and taxpayers.

The settlement calls for Purcell to be reinstated as chief executive and director, but then immediately resign. Purcell also will leave his position as a director on the board of Gulf Resources Pacific Ltd., a Gulf subsidiary whose stock holdings comprise the company’s primary asset.

Gulf’s bankruptcy has left roughly 2,000 Inland Northwest pensioners with the likelihood of reduced medical benefits. The company’s demise - caused in part by insider fraud and mismanagement that wasted millions of dollars - also has stuck federal taxpayers with a massive cleanup bill at the Bunker Hill Superfund site.

Allegations made by Purcell prompted U.S. Bankruptcy Judge Alfred C. Hagan to appoint an examiner who has scrutinized dealings at Gulf since its bankruptcy began in 1993.

The examiner found evidence of insider dealing, but has not yet proven that it took place.

Hagan appeared relieved on Friday that a trial in the Purcell matter is no longer needed. Hagan has presided over Gulf’s bankruptcy during the last 15 months. The matter has degenerated into a case of creditors and the company hurling allegations of misconduct back and forth.

That’s exactly what happened with Purcell. After he sent letters to creditors outlining alleged fraud at Gulf, Purcell himself was accused by the company of falsifying expense accounts and failing to perform his duties.

“Today happens to be my birthday,” Hagan said, adding that he couldn’t have asked for a better conclusion to the Purcell dispute.