Former Back9Network CEO Jamie Bosworth says he was forced out of the Hartford-based golf lifestyle startup he cofounded in a “struggle for power” with its current chairman.
In a memorandum submitted to the Connecticut Superior Court on Thursday, Bosworth responded to a lawsuit the company filed against him in December claiming he breached the terms of his seperation agreement by disparaging the company and its management to existing and potential investors, calling it a “diversionary tactic being employed by the Chairman [Sandy Cloud] in order to retain power and deflect accountability.” He accused Cloud of taking advantage of his medical condition to engineer his ouster and raised more questions about the financial health of the company.
According to Bosworth, Cloud seized control of the company while Bosworth was on a 90-day medical leave of absence after being diagnosed with atrial fibrillation, or AFib, a common heart condition. Bosworth says Cloud pressured him to resign as CEO by threatening to take his stock shares when he “was still undergoing treatment for his then existing health problem and still reeling from his public divorce” from Jennifer Lahmers, one of Back9Network’s early hires.
Bosworth resigned in July, shortly after the company announced its breakthrough broadcasting agreement with DirecTV, in part, he says, because Cloud claimed to have $10 million of institutional investment lined up on the condition of Bosworth’s departure and he didn’t want to “stand in the way of Back9 raising much needed capital.”
Bosworth alleges that Cloud failed to secure this additional investment, and as a result, the company doesn’t have the funds to pay him what he is owed under the terms of his seperation agreement.
Both Cloud and Back9Network CEO Charles Cox declined to comment on the lawsuit, though Back9Network’s attorney, Joshua Berman of the New York law firm Troutman Sanders, told Golf.com that Bosworth’s characterization of the circumstances of his departure from the company and his statements about Cloud were “entirely inaccurate and untrue” and praised Cloud for “[guiding] the company at all times with the utmost skill, professionalism and integrity.”
In the complaint, Back9Network alleges that Bosworth “sent a rash of text messages to Board members and existing and potential investors in the Company making disparaging remarks about the Company’s management, programming, brand and creative plan” and later “sent unhinged text messages” to the company’s senior managers threatening to call the police unless two department heads he considered “dangerous” were fired. The network also claims that Bosworth contacted an investigative reporter offering to divulge confidential information about the company. Bosworth has petitioned the court to stay the lawsuit and refer the matter to arbitration.
Paul McConnell, Bosworth’s attorney, told the Hartford Courant that he and his client “are surprised that the current Chairman Sandy Cloud would authorize a lawsuit that will assuredly prove to be detrimental to the interests of Back9. Mr. Bosworth created Back9 and remains its largest shareholder. He is eager to see Back9 succeed and is confident that it will with the right leadership.”
According to Cox, Back9Network has raised approximately $40 million from about 150 investors since 2010, including $5 million in grants and loans from the state of Connecticut, but recent revelations suggest that the company stands at a critical juncture. In January, Golf News Net reported that Back9Network missed a payroll, and last week, the network cut its full-time workforce by 35 employees, or about 40 percent. According to the Hartford Business Journal, Back9Network is trying to raise a “significant” amount of money just to keep its doors open and is searching for a capital partner or a possible buyer.
Cox would not comment on the report, saying only that Back9Network is “in the middle of a large capital raise.”