Confidential
Settlement – $407,000Facts
The plaintiff alleged he was hired as the defendant's chief financial officer pursuant to a written employment contract, and was subsequently terminated without cause, triggering a contractual severance benefit which the defendant failed to pay. The defendant counterclaimed against the plaintiff and its former CEO, alleging that the CFO's contract was invalid or fraudulently obtained. The CEO filed a counterclaim against the defendant/cross-complainant alleging breach of employment contract as well as alleging fraud in his hiring against the defendant and four of its directors.
Settlement Discussions
One individual director settled prior to his deposition for $7,000. The action was stayed as to a second individual defendant pending Chapter 7 proceedings. The remainder of the case was resolved through settlement.
Other Information
The settlement total of $407,000 is to be split evenly between the plaintiff and cross-complainant; $7,000 was paid immediately and the remainder be paid over three years contingent upon, and only in the event of, future stock sales of the company, in which case plaintiff and cross-complainant will receive 10 percent of the proceeds from the sale, up to a cap of $200,000 each.
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