In The Black Bull, Lorvik offers rather exotic services. If your Persuasion is high enough, you can pay for those services. He then gives you a key to a room located on the highest floor.
Go there with only the character that payed for the services and speak with a Lizard.
Choice 1: Decline
During the conversation you can decide that you don't want to use his services. You can then try with other character.
Reward: 3000 experience points
Choice 2: Spend a night together
If you decide to spend a night with the Lizard then you will wake up in underwear only.
Reward: 6000 experience points
It turns out that Lohar's people took all your belongings. You can attack them immediately. The backpack with your items can be found on one of the tables. If you spared them then you must go to Lohar who has your equipment.
If you don't have Shadow Over Driftwood quest in your journal then Lohar can propose that in exchange for your belongings you must find Mordus. Otherwise, the only option is to steal your items.
Then, you must go back to Lorvik and speak with him. You can kill him. Lorvik carries a lot of money so this is a great solution if you need money. You can also listen to what he has to say. He tells you that he did it for his daughter who is supposedly in the kitchen. Go there and ask Wyvlia about that. The woman tells you that Lorvik has no daughter. You can talk with him again.
Warning: If you completed The Missing Magisters quest then you can't prove that Lorvik is guilty. This locks another dialog option and you can't have another confrontation with Lorvik.