This article was updated on March 9, 2021. Scroll down for the latest.

A group of creditors who are owed money by the floundering online auctioneer Paddle8 are targeting former CEO Valentine Uhovski, alleging that he demonstrated a “reckless regard for his duties.”

Paddle8 filed for Chapter 11 bankruptcy protection in the southern district of New York in March, one week after the nonprofit New American Cinema Group sued the company for failing to turn over the proceeds of art sold at a charity auction.

The creditors are took legal action against Uhovski on May 1, seeking an approval from the court to pursue claims against him.

“I’m shocked because I was not aware of any lawsuit, especially this hurtful claim,” Uhovski told Artnet News in an email. “For months, I and all former Paddle8 staff members have been tirelessly fighting for the partners and a brand that we love. I’m still in touch and in unity with most of them. I left the company in February after months of deceit and misinformation. These lies and blaming techniques will not be tolerated by me, or the organizations that continue to be mistreated by the former owners.”

According to the creditors’ complaint, during his tenure as CEO, Uhovski “engaged in acts of gross mismanagement and disloyalty,” including misappropriating funds from the auctions to cover the company’s operating expenses.

As a result, the papers point to one nonprofit that consigned artwork to Paddle8 for an online auction, presumably referring to the New American Cinema Group. That sale included works donated by artists John Ahearn, Kiki Smith, Tom Otterness, Jim Jarmusch, and Walter Robinson, among others. But, according to the organization’s lawsuit, it had still had not received the funds from Paddle8 months after the sale. Meanwhile, collectors had started calling to inquire about the whereabouts of works they purchased at the auction.

“Paddle8’s pattern of conduct in withholding, and apparently misappropriating, funds that belong to a non-profit is very troubling,” Paul Cossu, a pro bono attorney for the cinema organization, told Artnet News in an email at the time. “As an auction house, Paddle8 “has a fiduciary obligation to hold and safeguard such funds in trust for its consignors.” A week later, the company filed for bankruptcy protection.

Uhovski, formerly the CEO of Tumblr, was appointed the head of Paddle8 in November, but resigned just a few months later, in mid-February. His predecessor, Izabela Depczyk, also resigned as CEO after two years.

The new complaint alleges that, in January 2020, Paddle8’s board of directors instructed Uhovski “to scale back business operations, cut expenses and conduct reductions in force.” He was then expected to present new budgets at a planning meeting in Florida, but never showed, according to the court papers. Uhovski resigned shortly thereafter.

As a result of Uhovski’s “failing to properly apportion sale proceeds,” the creditors suffered damages of approximately $1 million,” the papers allege. They are now seeking that amount, plus interest.

Update, March 9, 2021: The creditors voluntarily dismissed their case against Valentine Uhovski on February 8, 2021.