Arcturus Therapeutics is suing its former CEO, nearly two months after he challenged the legality of the company terminating him.
A March 27 complaint filed in San Diego Superior Court alleges executive misconduct against past CEO Joseph Payne, including attempting to transfer intellectual property to a business partner who heads Canada-based Providence Therapeutics “for no articulable business reason.”
The San Diego company’s lawsuit also contends Payne was operating a lucrative side business without notice while neglecting Arcturus duties.
In an apparent battle for the company, Arcturus announced the lawsuit in a March 28 letter to shareholders, alleging their investment is at risk because Payne and associates are seeking to handpick new board members during a May 7 meeting.
The firm Barnea, Jaffa, Lande & Co., which is representing Payne, did not return a request to comment.
In a Feb. 6 letter to the U.S. Securities and Exchange Commission, a law firm representing Payne demanded that the company reinstate him. It claimed four board members acting to seize control of the company passed a resolution terminating Payne without such authority, and then presented the resolution at a board meeting despite it not being on the agenda.
The lawsuit seeks damages for alleged breaches of contract and fiduciary duties.