VOL. 124 | NO. 251 | Wednesday, December 23, 2009
Fired CEO Sues Luminetx
By Tom Wilemon
Richard Kindberg, the former chief executive officer of Luminetx Corp., is suing the company after being fired this month following the announcement of a buyout.
Kindberg contends Luminetx officials misrepresented the company’s status when he agreed to relocate to Memphis to take the job. He claims the company failed to pay him a signing bonus and that it violated the terms of his contract. The lawsuit was filed Friday in Shelby County Chancery Court, according to The Daily News Online, www.memphisdailynews.com.
Shareholders of Memphis-based Luminetx approved on Dec. 11 a plan to sell the company to Christie Digital Systems Inc.
Kindberg served at the helm of the company for fewer than nine months. He alleges in the suit that Al Gossett, the chairman of the Luminetx board of directors, misrepresented facts about the company when Kindberg was recruited for the job.
The allegations are spelled out in a complaint filed on Kindberg’s behalf by Bass, Berry & Sims PLC. The misrepresentations masked the difficulty Kindberg would have in obtaining additional financing for Luminetx, which was running out of money, according to the complaint.
Chris Schnee, interim chief executive officer at Luminetx, said “the company is confident that all of Mr. Kindberg’s claims will be dismissed and the matter will be resolved in favor of Luminetx.”
“Mr. Gossett misrepresented to Mr. Kindberg material facts regarding the number of shares Luminetx had issued and could issue under its existing charter,” the complaint states. “Mr. Gossett also made material omissions of fact when directly asked about such matters, including, but not limited to, omissions regarding ongoing AccuVein litigation, which also proved to be a deterrent to attracting potential investors.”
Although Gossett is mentioned throughout the complaint, he is not named as a defendant.
Kindberg was fired Dec. 2 and was told his dismissal was without cause, but later informed his dismissal was for cause, according to the complaint.
“Luminetx has also wrongfully deducted from Mr. Kindberg’s base compensation disputed amounts Luminetx claims Mr. Kindberg owes to Luminetx,” the complaint states. “In addition, Luminetx has informed Mr. Kindberg that he will no longer be covered by Luminetx’s insurance plans as of Dec. 31.”
Kindberg is seeking an award of the disputed benefits and payments as well as compensatory and punitive damages.
Luminetx manufactures and sells VeinViewer, a medical device that allows health care professionals to easily view blood vessels beneath the skin. The company had only $313,377 in cash as of Oct. 31 and was operating with a $2,874,544 net income loss for the first 10 months of this year, according to a statement the company sent to shareholders recommending approval of the buyout.