Kentucky Retirement Systems, Frankfort, filed an insurance claim to recoup losses that officials claim were sustained through breaches of fiduciary duty by former CIO John Krimmel and Gordon Mullis, former chief operating officer.
The claim, filed Sept. 26 with Federal Insurance Co., states that Mr. Krimmel, who resigned May 10, and Mr. Mullis, who resigned April 10, "did not perform adequate due diligence" before investing in real estate for the $14 billion system. The property was purchased by the system in February for roughly $700,000 after being sold several weeks earlier for $450,000.
The alleged breaches of duty "involve the failure to ascertain the value of the property (or) to evaluate its potential for current and future investment return," according to the letter, which also alleges the Messrs. Krimmel and Mullis exceeded their authority in arranging the purchase. The claim seeks to recoup $600,000.
Separately, Mr. Krimmel now serves as a senior vice president and consultant at Callan Associates in Atlanta, confirmed spokeswoman Nancy Malinowski. The position is new. He reports to Jeanne Valcik, senior vice president and manager. Mr. Krimmel did not return a call for comment.
Mr. Mullis could not be reached for comment at press time.