ASHLAND, Ky. (BUSINESS WIRE) — Braidy Industries founder and largest shareholder Craig T. Bouchard, represented by McBrayer PLLC, Gibson, Dunn & Crutcher, LLP and Potter Anderson Corroon LLP, filed suit on Friday, Feb. 14 in the state of Delaware to exercise his rights under a Voting Agreement entered into by the company and shareholders.
The Voting Agreement provides Bouchard the unequivocal right to promptly remove the named defendants and fellow board members from their board seats: Michael Porter (Harvard Business School) Christopher Schuh (MIT Department of Materials Science,) John Preston (TEM Capital,) and Charles Price. In an accompanying letter to fellow shareholders, Bouchard cited material concerns regarding the judgment of the named directors as the rationale for his removal request.
The named defendant board members, in an unplanned action, voted on Jan. 28 to change leadership, removing founder Bouchard as Braidy Industries’ Chairman and CEO, jeopardizing approximately $260 million in potential equity investments from new investors as detailed in the lawsuit. Furthermore, according to the lawsuit, following Bouchard’s removal, the referenced prospective investors may now have elected to wait for the resolution of the dispute over control of the company, with a planned investment of $60 million from “one of the world’s largest companies” sidelined because of Bouchard’s removal.
Concerning his filing, Bouchard stated:
I informed the Board that the company had line-of-sight and was in discussion with investors to fund the entire $1.8 billion needed to build its mill in East Park, Ashland, Kentucky, in alignment with customer purchasing schedules. It seems evident that the named defendants put three years of progress and stockholder value at risk. We must simply remove these individuals from the board, as they are no longer showing proper judgement and replace them with directors who have more experience in the areas that have now become critical to building the company. This is vital to investor confidence.
The board members’ actions last week, including terminating irreplaceable members of the senior management team, created an urgent risk of irreparable damage that cannot be ignored or allowed to linger. The board members have placed the community of Ashland and North East Kentucky, suffering from job loss and the ensuing opioid crisis, at risk. I believe the job of the Chairman and CEO is to look out for shareholders and the community.
The current situation left me with no choice but to file this lawsuit in the Delaware court, seeking to enforce my unequivocal contractual rights—under the Voting Agreement that the company, Board and the stockholders agreed to—to designate and terminate directors. The lawsuit seeks expedited consideration of my request to complete the removal of these board members. I will designate and announce a talented and qualified new board shortly.
Braidy Industries was my idea three years ago. In the few years since its inception, the company acquired hundreds of acres of land, acquired three large manufacturing facilities and acquired two award winning ultra-high-strength powder metallurgy companies, all the while remaining debt free to this day. Braidy hired world class aluminum executives and many great scientists and began a nationally recognized workforce development degree program, all while designing and permitting the lowest cost aluminum rolling mill in the word with the expected lowest carbon imprint in North America. The mill capacity is reserved by approximately 20 large customers for seven years.
The other board members now have a different vision. My vision remains the same.