Terran Orbital is suing its former chief technology officer, Austin Williams, just over a month after he and other shareholders publicly called for a change in the company’s leadership.
Williams was a co-founder of satellite design and manufacturing company Tyvak Nano Satellite Systems, which was acquired by Terran Orbital in 2014 and has since become the core of the business. He is one of the few senior engineers who resigned in November 2022; according to reports by SpaceNews At the time, the trio resigned amid continuing disagreements between the engineering and manufacturing departments over how to meet production targets.
Terran Orbital’s complaint filed Nov. 13 alleges that Williams failed to provide adequate advance notice of termination under his employment agreement. The company further alleges that his conduct acted against the best interest of the company and with a lack of good faith, in breach of his fiduciary duty and to the detriment of the company. Williams, the complaint states, “acted with oppression, fraud and malice.”
The company further claims that Williams was “aided and abetted” by a number of unknown individuals, which it identifies in the lawsuit as “(John) DOES 1-100.” Terran will update the complaint”when the true identities of any DOES are determined,” the lawsuit says.
The lawsuit against Williams comes just over a month after he and other investors publicly called on Terran’s board to make drastic changes to the company’s leadership, including installing a new CEO in place of Marc Bell and “reconstituting ” board. The investor group, which owns approximately 8.4% of the company’s outstanding shares, publicly published his letter to the board calling for these changes on October 12. The group declined to comment for this story.
The group, which includes Tyvak’s other co-founders Jordi Puig-Suari and Roland Coelho, says in its letter that the company is “operating from a position of weakness due to leadership failures, lack of internal controls, poor corporate governance and loss of public authority”. market confidence. They cite an order book valued at $2.6 billion and the company’s pitiful share price: $0.81 today.
The first letter states that Williams would “appreciate the opportunity to explore” returning to the company provided the changes are implemented.
The group has sent two more letters; the third letter was sent on November 9, just four days before Terran filed his lawsuit against Williams. In it, they reiterate their request to meet with the board of directors to discuss their proposals, including discussion of the CEO candidate the group identified to replace Bell.
“It is simply unacceptable that the Board has refused to meet with us and has rather decided to adopt an apparently hostile and dismissive attitude towards us as shareholders,” the letter says. “We believe that stance only further erodes shareholder value and market confidence in Terran.”
While the lawsuit will need to be evaluated on its merits, it is rare for a company to sue a departing executive a year later for failing to provide adequate notice. Observers, like other shareholders, may reasonably interpret the company’s actions in this context as retaliatory or punitive, regardless of the outcome.
The lawsuit was filed in the Superior Court of California under case number 30-2023-01361218-CU-BC-CJC.
