Yesterday, RideApart broke the information that Damon Inc., which was previously Damon Motors, the all-electric motorbike startup out of Canada, was being sued by a number of sources and was down to only 11 full-time staff. There was a lawsuit involving again hire by its landlord in Canada, a lawsuit from investor Andy DeFrancesco, and the corporate’s 10-Okay submitting stating that it had 13 staff in complete, together with two contractors.
It additionally had a bunch of debt, little to no income, no manufacturing schedule for its promised 200 mph, 200 miles of vary electrical superbike, and about half of these staff have been executive-level management, the latter of that are essential as they’re all named within the final huge lawsuit we’re right here to debate immediately.
See, whereas the opposite two lawsuits have huge implications for the corporate, the one introduced by Damon’s co-founder and former CEO, Jay Giraud, is the messiest of all of them, and revolves round what Giraud believes to be his rightfully owed separation package deal when he was pressured out of the corporate final 12 months. Damon, for its half, has denied it is finished something however ship what Giraud and the corporate agreed upon, however that is not what the founder thinks, therefore the lawsuit.
Nonetheless, the proof offered by Giraud does not precisely paint him in one of the best gentle, brings DeFrancesco again into issues, and noticed the corporate deny almost each single allegation made by Giraud.
In keeping with Giraud’s lawsuit, which was filed in February with the Supreme Courtroom of British Columbia, he alleges that the board referred to as him in sooner or later on a whim, informed him he might both resign or be pressured out, gave him an ultimatum of taking their proposed severance and separation package deal or get nothing, and should conform to all the pieces that day.
“On or about December 4, 2024, at round 2:00 PM, the Board knowledgeable the Plaintiff that they have been providing the Plaintiff a severance package deal in change for his resignation and required his attendance at a gathering with the Board later that day. On or about December 4, 2024, at round 6:00 PM, throughout a gathering between the Plaintiff and the Board (the “Assembly”), the Plaintiff negotiated the supplied severance
package deal and reached an settlement with the Board concerning the phrases of the severance package deal,” states Giraud’s lawsuit.
It added, “Given the roughly 4 (4) hours discover of the Board’s intentions earlier than the
Assembly, the Plaintiff was unable to acquire impartial authorized recommendation previous to the Assembly. In the course of the Assembly, the Board knowledgeable the Plaintiff that if he didn’t resign, the Board would terminate the Plaintiff for trigger with out authorized foundation. The Board knew that it didn’t have trigger to terminate the Plaintiff’s employment settlement. On or about December 4, 2024, following the Assembly, the Board despatched the Plaintiff an e-mail confirming the agreed upon phrases of the severance package deal, Board responses italicized, in change for the Plaintiff’s resignation,” and resulted in a bunch of supposed concessions by Damon’s board and executives, together with Giraud’s rapid resignation.
It is right here, nevertheless, the place the rivalry lies as Giraud states that he is owed not solely again pay for his place, but in addition bonuses that have been supposedly promised to him each in his resignation settlement and prior contract. Damon, for its half, has since responded to Giraud’s declare and said unequivocally that it denies all his allegations. In no unsure phrases, Damon responded with, “The Defendants deny each allegation contained within the Discover of Civil Declare.” And so the case remains to be ongoing.
Nonetheless, one a part of Giraud’s lawsuit should be put into the document, because it pertains to a letter that Giraud himself submitted as proof to his claims, which does not paint the founder in any form of good gentle, and was authored by Andy DeFrancesco, the identical investor who’s additionally suing Damon Inc. at current. This is the letter.
“Mr. Giraud, We, the undersigned shareholders of Damon Inc. (the “Firm”), are writing to formally place you on discover that sure shareholders are actively considering the graduation of authorized motion in opposition to you, personally, in connection along with your conduct throughout your tenure as Chief Government Officer of the Firm. It has develop into evident that below your management, a sequence of selections and actions resulted in vital hurt to the Firm and its shareholders, which embrace, however are usually not restricted to, the next:
1. Underneath your oversight, shareholder capital was recklessly squandered. The Firm’s funds have been depleted with out accountability, tangible outcomes, or returns, reflecting gross negligence and a blatant disregard for fiduciary obligation. You constantly made misrepresentations concerning the progress of the Damon bikes, as shareholders have been led to imagine that the bikes have been advancing towards manufacturing. Regardless of the expenditure of roughly $75 million, the bikes stay in a non-production stage, elevating critical issues in regards to the accuracy and integrity of public representations made below your management. 2. The choice to take the Firm public via the enterprise mixture with Graffiti was executed in a way that lacked correct diligence, strategic foresight, and planning. As an alternative of enhancing the Firm’s worth, this rushed transaction destabilized the Firm’s
monetary place and exacerbated current challenges. 3. You engaged in nepotistic conduct by appointing your partner to an govt function with a considerable and unjustified wage. This appointment was wholly unwarranted and constituted a transparent misuse of company funds and a flagrant abuse of your place. 4. We’ve been apprised of credible allegations regarding your misappropriation of company funds throughout your time as CEO. This conduct, if substantiated, constitutes a extreme breach of your fiduciary duties to the Firm and its shareholders. 5. It has additionally come to the shareholders’ consideration that you just made
vital monetary commitments with out the required board approvals, which have severely harmed the Firm’s monetary stability. Such actions symbolize a breach of your tasks and have compounded the injury already inflicted upon the Firm. Given the foregoing, we want to make it unequivocally clear that any try by you to intrude with the Firm’s affairs or search or compensation past what’s lawfully excellent in your prior service is not going to be tolerated. Ought to any such motion be taken, we are going to instantly pursue all accessible authorized treatments in opposition to you personally, and in opposition to the Firm to the extent it permits or facilitates any such disbursement. Your departure from the Firm should mark the top of your involvement. Any additional disruption, interference, or entitlement you
try to claim might be met with swift and decisive motion. This letter serves as a proper warning, and we strongly advise you to manipulate your self accordingly.Yours actually,
Andy DeFrancesco, Sol International and Benevolent Capital and Different Main Traders”
That is a damning appraisal of Giraud’s tenure on the firm, and wild that Giraud himself included it, however it brings up questions RideApart requested once we first began wanting into Damon’s tenuous scenario final 12 months. And it speaks to quite a lot of allegations we heard from former staff who described Giraud’s management in comparable methods, i.e. petulant and chaotic, his appointment of his fiancee, Amber Spencer, who began within the advertising staff and rose to Chief Advertising and marketing Officer in brief order, and the place all of the funding made by of us like DeFrancesco went.
If this letter is true, nevertheless. Once more, in accordance with Damon Inc.’s response, it denies any and all allegations made, however Giraud states that “The Letter was broadly distributed to shareholders of the Company Defendant, administrators of the Company Defendant, former administrators of the Company Defendant,
potential traders, inter alia. The Letter contained allegations which have been unfaithful and harmed the Plaintiff’s status. The Letter contained allegations which have a detrimental and dangerous impression on the
Plaintiff’s skill to discover a new employment or carry out capital elevating actions as is likely to be anticipated of chief govt officer. The Letter was despatched by or on the path of the Company Defendant.”
Both approach, Giraud is in search of what he is supposedly owed, Damon Inc. is denying all the pieces, and there are two different main lawsuits on the desk in opposition to the corporate’s dwindling workforce. Once more, RideApart reached out to Damon Inc. for remark, however has but to listen to again on the time of writing. If and once we obtain something, we’ll replace our story.
