Chicago Business Litigation Lawyer Blog
Envoy Medical is a medical device manufacturer based in Minnesota with technology that has the ability to restore hearing to the deaf. Unfortunately, the company’s prospects were allegedly cut short after Glen Taylor took over as CEO, which not only caused financial harm to the company but denied life-changing technology to the deaf.
As CEO of the medical-device company, Patrick Spearman guided the company to the early success it enjoyed, including getting FDA approval for the invention and marketing the company’s new device as a replacement for hearing aids. A video advertising the device that showed a mother getting emotional when she heard her voice for the first time after getting the implant went viral.
Another remarkable story of the potential of the device was of a Deputy Sheriff with profound hearing loss who, after receiving the implant, passed the hearing test that allows him to work the streets, while law enforcement officers with hearing aids are kept off the streets.
The medical invention was also featured on a variety of prominent television programs, including The Celebrity Apprentice, CNN, and the Ellen DeGeneres Show, among others. In 2011, Google gave the company an award for having created one of the top 11 inventions of the year.
In 2012, Taylor’s daughter was fired with cause by Spearman’s management team, at which point Taylor allegedly retaliated by having Spearman fired as CEO and taking his place in that role. Taylor allegedly then went on to fire all the key people who had the knowledge necessary to ensure the company’s financial success.
The billionaire business owner and majority shareholder of the Minnesota Timberwolves and the Minneapolis Star Tribune allegedly went on to use his money and influence to force control of the company out of the hands of its shareholders by using a series of loans and preferred share purchases to dilute their voting power. According to the lawsuit, the terms of those loans and purchases were allegedly not fully disclosed to the shareholders.
Not only did Envoy’s financial performance decline with Taylor as CEO, but Taylor allegedly restructured the company’s finances so he could personally profit from the company’s financial distress. Taylor’s own financing company gave loans to the medical-device company, and if the company can’t pay back those loans, Taylor can claim ownership of the company’s assets, including the hearing implant technology.
Now Spearman, along with former President, Shelly Amann, along with several shareholders, are suing Taylor for fraud and unjust treatment of the company’s shareholders. Kevin McHale, a former employee of Glen Taylor and the Minnesota Timberwolves, has also joined Spearman, Amann, and the shareholders in filing this lawsuit against his former employer.
McHale encouraged others to invest their money with Envoy Medical, and as a result, he feels he needs to be involved in this lawsuit because of the harm that is being done to the company’s small shareholders. He has seen first hand how well the hearing implant device works, and so he believes that Taylor and the other directors of the company are allegedly responsible for potentially billions of dollars in damages to the company’s shareholders.
A lawsuit might be able to achieve justice for the shareholders, but the fate of the technology that can restore hearing to the deaf might already be sealed.
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