After a dispute occurred between Chairman and members of the board of directors of closely held corporation, Chairman removed several members from the board and sued them for civil conspiracy, tortious interference, libel, and breach of fiduciary duty. The Delaware Court of Chancery granted the defendants’ motion to dismiss, finding that the plaintiffs failed to allege facts sufficient to prove civil conspiracy, breach of fiduciary duty, or tortious interference. The court also determined that the Chairman was a limited-purpose public figure and the plaintiffs therefore did not meet the heightened pleading standard for their libel claim.
In 2010, Todd O’Gara founded Wanu, a Delaware corporation based in California that produces nutrient-infused water. In 2014, O’Gara stepped down as CEO, but continued as Wanu’s President, Chairman, and largest stockholder. In 2017 O’Gara executed voting agreements and irrevocable proxies with a number of Wanu stockholders. The voting agreements, combined with his shares, gave O’Gara control over approximately fifty-two percent of the voting power in Wanu.
In March 2018, a majority of Wanu’s board of directors voted to remove Wanu’s CEO, Steve Dollase. In April 2018, Dollase and two Wanu stockholders, Jay Binkley and Greg Hunter, raised allegations against O’Gara. The three alleged that O’Gara had inhibited Dollase’s ability to perform as Wanu’s CEO in a variety of ways. The three also alleged that O’Gara’s business expenses and spending were excessive and unsustainable and that O’Gara had executed an unauthorized certificate issuing several hundred thousand shares to himself.
In May 2018, Wanu engaged independent counsel to investigate the allegations. The investigation concluded in July 2018 and its findings, that Dollase was informed or had the ability to be informed about many of the issues he complained about; that his allegations were motivated by his dislike of O’Gara’s management style and personality; that he was generally not well-liked as a leader; and that his management style created tension within the office, were reported to the board. After this, the Dollase faction raised new allegations against O’Gara, namely that O’Gara made misstatements about his educational background in various documents prepared for prospective investors in 2014 and 2015. Wanu engaged another investigator to look into the new allegations. This investigator summarized his findings in August 2018, stating that he was unable to confirm that O’Gara had in fact received degrees from the various educational institutions he claimed to have attended. Continue reading ›