Fired RadiumOne CEO to Sue Company

By Paul Ausick Updated Apr 27, 9:23PM EDT · Published May 30, 9:10AM EDT

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When ad technology start-up RadiumOne kicked off its hunt for an initial public offering late last year, the company’s investors and board probably didn’t expect this particular diversion. The board fired RadiumOne’s founder and chief executive, Gurbaksh Chahal, late last month after he pleaded guilty to misdemeanor charges of battery and domestic violence for hitting his girlfriend. Chahal had originally been charged with 45 felony counts of domestic violence, but those charges were dropped when he pleaded guilty to the misdemeanor charges.

The guilty plea set off a social media attack on Chahal that led to his firing as CEO within a week and his subsequent resignation from RadiumOne’s board of directors earlier this week. On Thursday, Chahal sent an open letter to the company’s board stating his side of the events that led to his firing and stating further that he is filing a lawsuit against RadiumOne for wrongful termination.

In his letter to the board, Chahal said that he offered to resign last August when the criminal charges were first brought against him and that he agreed to the plea bargain only for the company’s sake:

By April, after the first settlement conference and preliminary hearing, my legal team was able to get a misdemeanor plea that was satisfactory to both the RadiumOne board and the bankers. You were well aware that if I had gone to trial I would have gotten full exoneration. Instead, I sacrificed full exoneration for the sake of the Company’s IPO, and — more importantly — for you and for our shareholders.

There is at least a whiff of martyrdom in Chahal’s comment here and in other parts of the letter, as well as in other things he has written and said since April. He has admitted to letting his temper get the better of him, but he claimed there is “a difference between temper and domestic violence.” That may be a distinction without a difference. In any event, it’s a very weak argument.

What happens with RadiumOne’s IPO now is anyone’s guess. A lawsuit by the company’s founder, former CEO and undoubtedly a large shareholder is a serious overhang that bankers are not likely to want any part of.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.