Miffed CEO Sues Bain for $20 Million [View all]

[The Straight Story]

Miffed CEO Sues Bain for $20 Million

CHICAGO (CN) - Bain Capital promised the CEO of a takeover target $22 million over 5 years, but fired him within the year because Bain only wanted to "take out" a competitor, the ex-CEO claims in court.

Richard Roy Jr. sued Applied Systems, its former CEO James Kellner and Bain Capital Partners in Cook County Court.

Roy says he founded Artizan Internet Services, specializing in insurance software, and sold it to Applied Systems in December 2010. Bain Capital had bought Applied Systems, insurance management, in 2006.

...

But Roy says that Kellner "knew that Bain had no intention to pay $22,000,000 for Artizan. Therefore, Mr. Kellner knew that most of the salary, bonus and performance payment terms he was proposing in bad faith to Mr. Roy were illusory and would never actually be paid by Applied."

In fact, Roy claims, "Bain wanted to ready Applied for a sale or 'exit' (to use a private equity term) over the next few years and wanted to grow Applied through acquisitions. On information and belief, Bain had already expressed reservations about whether Mr. Kellner was a 'deal guy' who could identify and close accretive acquisitions. Mr. Kellner was desperate to show Bain that he too was a 'deal' guy just like the Bain guys, and could grow Applied through acquisitions. Bain apparently was not persuaded and has since replaced Mr. Kellner with Mr. Reid French, an executive with a much stronger merger and acquisition background than Mr. Kellner." (Parentheses in original.)

http://www.courthousenews.com/2012/11/26/52504.htm