Then, there is Marc Potash, the former CEO and founder of SecureNet, a payment processor.
Potash claims he
was duped into selling 52% of SecureNet
to Sterling Partners
in 2010, and filed a $ 375 million lawsuit against the PE firm.
The Baltimore-based PE firm agreed to pay $ 56 million to Potash
for the stake, plus two installments of $ 15 million and one of $ 10 million, if the company hit certain EBITDA targets, according to legal documents.
"I was completely misled from start to finish," Potash
"It was really like a modern day heist."
was "stripped" of his
powers as CEO of SecureNet
once the deal closed in September 2010, the court documents say.
was removed as CFO and as head of SecureNet's
technology at the first post-closing board meeting, the documents say.
also claims his
role was reduced to a sales position until he
was eventually replaced in August 2011.
concealed its intent not to pay Potash
any monies beyond the initial payment, to immediately remove him as CEO and to terminate him in order to avoid payment of the installments," the complaint says.
Potash's suit alleges Sterling
promised that SecureNet
would have access to its "BVA Program" once the deal closed.
The program, a series of firm-wide best practices and processes developed by the PE firm over 25 years, was shared with all of Sterling
portfolio companies, the documents say.
The methodology helps "talented and successful entrepreneurs" and is a "key element" of Sterling's success, according to the complaint.
, once it acquired SecureNet
, never made the program available to Potash
, the documents say.
also hired numerous individuals to boost SecureNet's
Because of this Potash claims the company couldn't achieve the EBTIDA milestones, according to court documents.
In November 2011, Sterling fired Potash "for cause," according to court documents (Potash allegedly lied to two SecureNet customers, used company funds to pay for his wife's car expense and used company funds to pay for his own attorney fees after being told not to, the document says).
, according to the documents, claims Sterling's allegations are without factual basis and a way for the PE firm to avoid paying him any of the installment payments required under the Unit Purchase Agreement.
The lawsuit, filed March 14 in Baltimore City Circuit Court, includes counts of fraud, breach of contract, negligence as well as tortious interference.
is seeking a total of $ 375 million, which includes $ 82 million in actual damages, according to Andrew Hall, of Hall, Lamb and Hall, which is representing the ex-CEO.