FRANKFORT, Ky. (AP) - The founder of an aluminum company planning to build a $1.7 billion plant in Appalachia has sued Braidy Industries Inc. and several of its stockholders in fighting back against his ouster as CEO.
In his lawsuit, Craig Bouchard claims several defendants breached their obligations under a company voting agreement after refusing his efforts to remove four executives from Braidy’s board.
The suit contends that Bouchard had “unilateral, unqualified contractual power” to cause the removal the company’s board members at any time and to appoint new members.
“The voting agreement compels Braidy’s stockholders to vote in accordance with Mr. Bouchard’s desire to effect such removal upon his request,” the suit said.
Defendants include the company and four Braidy board members and stockholders - John Preston, Charles Price, Michael Porter and Christopher Schuh.
Bouchard was removed as CEO in a management shakeup in late January. He filed suit on Friday in Delaware, where the company is incorporated. The suit was first reported by the Courier Journal.
The company said Tuesday that Bouchard’s legal action was expected. The company was displeased with the “status of financing” for the planned mill in northeastern Kentucky and had other concerns about Bouchard’s performance as CEO, a Braidy statement said.
“Thus, as part of its fiduciary role on behalf of the shareholders, the board voted to take action that it believes will be upheld in court,” the statement said.
Bouchard’s lawsuit further exposed internal strife at Braidy amid the high-profile management shakeup, which raised new concerns about the prospects of the uniquely stctured project.
Kentucky taxpayers have a direct stake in Braidy’s plans to build the aluminum rolling mill near Ashland, Kentucky. During his term as governor, Republican Matt Bevin persuaded Kentucky lawmakers to approve a $15 million state investment in the project.
Other defendants in the suit include a state-sponsored investment company.
Braidy’s new chief executive recently told a state legislative panel that the company still needed to raise $500 million in equity for the mill project. The company has said the project would create about 1,500 construction jobs and more than 600 fulltime mill jobs.The company says it intends to get the project built “as promptly as possible.”
In his suit, Bouchard asks a judge to order the stockholder defendants to comply with contractual obligations under the voting agreement. That compliance includes voting for the immediate removal of Preston, Price, Porter and Schuh as board members, the suit said.
In a follow-up statement, the company noted Tuesday that Bouchard was “unsuccessful in his efforts to obtain stockholder support in replacing the board of directors.” The company said a majority of stockholders support the board’s action to remove Bouchard as CEO.
The suit said Bouchard’s ouster by the company’s board came “without notice or explanation.”
The ouster came at a time when Bouchard was making headway in potentially lining up more financing, the suit indicated. His removal “cut short” his “promising negotiations” with a private company to finance mill equipment and building expenses, it said. It came at the “very late stage” of a corporation seeking approval of a $60 million investment in Braidy, and when another investor was showing strong interest in a potential $200 million investment, the suit said.
Now the company considering the $200 million investment has said it wanted to see “the dust clear” before proceeding, the suit said. The company weighing the $60 million investment signaled it was reluctant to move forward without Bouchard in charge of Braidy, the suit said.
The suit said Bouchard will suffer “irreparable loss, injury and damage” without a favorable court ruling. Bouchard is also seeking unspecified damages.
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