27 Nov Cannabis social network sues ex-CEO
MassRoots, a cannabis social networking app company, is suing its founder and former CEO.
The Denver company, which ousted founder Isaac Dietrich last month, alleges in a civil suit the former CEO misappropriated $250,000. The company also accuses Dietrich of illegal drug use and inappropriate sexual activity.
Marijuana Business Daily reports:
Dietrich – who remains a member of the MassRoots board of directors – called the lawsuit “completely unfounded” and “frivolous.”
He also told Marijuana Business Daily he would proceed shortly with efforts to oust the other three board members.
The suit sheds new light on the reasons behind Dietrich’s surprise ouster last month. Until now, the company had remained mum on why it removed Dietrich – and installed Scott Kveton as CEO.
“Dietrich has been unjustly enriched by paying himself and others … amounts in excess of $250,000, without authorization and without Company approval,” according to the suit, which refers to those payments as “civil theft of Company funds.”
The company also charged that Dietrich deliberately hid the payments from the MassRoots board of directors, “knowing that the transactions involved unauthorized appropriations of Company funds and knowing MassRoots would object to the transactions if discovered.”
Dietrich, though, says an audit earlier this year found “no material deficiencies,” in the company’s books. He adds that the suit is an attempt to intimidate him into backing off his effort to oust three board members.
According to Marijuana Business Daily:
“The proxy is being filed today, so it’s going to be very fast,” Dietrich said. “I think within 48 hours of the definitive proxy being filed, I will have the votes to remove the board. This lawsuit is not going to have any impact on that vote, and I’m still going to win by a very large margin.”
While the suit doesn’t go into detail, it states that Dietrich was terminated due to “evidence of serious misconduct,” including “illegal drug use at the workplace, improper sexual activities involving the workplace, and misappropriation and misuse of Company funds.”
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