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Braidy: Ex-CEO spent improperly

The back and forth between the founder of Braidy Industries and the company’s board continues.

In response to founder Craig Bouchard’s suit against the board of directors for his being ousted, the company filed a response, saying that he had traveled the globe for personal reasons, but used the company credit card. Bouchard denied the charge.

Bouchard filed a suit on Feb. 14 in a Delaware court to exercise his rights under the company’s voting agreement to remove people from the board of the company after the board voted in January to oust him as the company CEO and president.

The company announced that Braidy Industries president Tom Modrowski, who has been with the company since it started, would be the interim CEO and that board member Charles Price would be chairman of the board of Braidy Industries.

In a letter to shareholders, Bouchard cited material concerns regarding the judgment of the named directors as the rationale for his removal request. In his lawsuit, he is seeking to remove board members from their board seats including Price, Michael Porter, of the Harvard Business School, Christopher Schuh, of the MIT Department of Materials Science, and John Preston, of TEM Capital.

Bouchard said his removal jeopardizes approximately $260 million in potential equity investments from new investors as detailed in the lawsuit. Furthermore, according to the lawsuit, following Bouchard’s removal, referenced prospective investors may now have 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.

The company responded by saying that Bouchard’s suit was an expected step in removing him.

“The board of directors was not pleased with the status of financing for the mill in Boyd and Greenup counties, and has other concerns regarding his performance as CEO,” Braidy Industries said in a press release. “Thus, as part of its fiduciary role on behalf of the shareholders, the board voted to take action that it believes will be he upheld in court under Delaware law. Mr. Bouchard, as CEO, must be held accountable and the board of directors is willing to do what it takes to ensure that occurs. We intend to get this project built as promptly as possible.”

The Courier-Journal reported that Price told Bouchard he was on administrative leave on Feb. 3.

The newspaper also reported that the company has retained a company to investigate Bouchard’s spending and is expecting a report within two months.

In its court filing, Braidy claims its chief financial officer, Julio Ramirez, informed the board about “his concerns about Bouchard’s apparent misuse of Braidy funds, violation of company policy, use of a questionable capital raise advisor, undisclosed related party transactions, poor judgment and other decisions that worsened the company’s financial liquidity situation, and misrepresentations to the board and other stakeholders.”

The board had authorized the company’s chief financial officer Julio Ramirez to do an internal investigation and that he found several things that were red flags, including Bouchard had charged personal expenses to a company credit card in violation of the company travel policy and had charged the company for chartered private planes. The company said in the court filing that their concerns were confirmed by Bouchard’s Facebook posts, “including posts suggesting that Bouchard’s recent globe-trotting (paid for by the Company) resulted from his personal, as opposed to business, motivations.”

On Friday morning, Bouchard responded on Facebook that a Braidy public relations firm had leaked “a false and defamatory story to KY newspapers” and that he had never had an unauthorized expense.

He said that Ramirez and his team had acted irresponsibly by posting pictures of him in business meetings and pictures of when his daughter traveled with him on her 18th birthday and that he paid her expenses on the trip.

“The CFO and his team approved all executive expenses on a monthly basis since the founding of the company. In three years, not even one issue with my expenses,” Bouchard said. “Now, a month after my removal they have made outrageous deliberate inaccurate suggestions about my expenses unsupported by facts.”

He said that, in six months, he flew roughly 135,000 miles and spent 99 days on the road building Braidy Industries and that his family made sacrifices for him to do that. He said he often flew coach/economy class rather than first-class or business class to save money.

He said that Ramirez’s team had been called to task for material weakness in controls created by his team.

“These people will each be held accountable for their defamatory and slanderous actions,” Bouchard wrote. “During the past three years. I traveled the world to build Braidy and we had line of sight to over $2 billion to fund the mill. Their actions needlessly endangered the prosperity and lives of all of you in NEK (northeastern Kentucky).”

Bouchard has asked the Delaware court for an expedited hearing to get the matter resolved as soon as possible.