Terran Orbital is suing its former CTO, Austin Williams, a little over a month after he and other shareholders publicly called for a change in company leadership.
Williams was a co-founder of satellite design and manufacturing company Tyvak Nano Satellite Systems, which was acquired by Terran Orbital in 2014, and has since become core to the business. He is one of a handful of senior engineers who quit in November 2022; according to reporting from SpaceNews at the time, the trio resigned amid ongoing disagreements between the engineering and manufacturing departments on how to meet production targets.
Terran Orbital’s complaint filed on November 13 alleges that Williams did not provide proper advance notice of termination per his employment agreement. The company further alleges that his conduct acted against the company’s best interest and with a lack of good faith, in breach of his fiduciary duty and in harm to the company. Williams, the complaint states, “acted with oppression, fraud, and malice.”
The company further states that Williams was “aided and abetted” by some number of unknown people, which it identifies in the suit as “[John] DOES 1-100.” Terran will update the complaint “when the true identities of any DOES are ascertained,” the suit says.
The suit against Williams comes a little over a month after he and other investors publicly called on Terran’s Board of Directors to make drastic change to company leadership – including by installing a new CEO in place of Marc Bell and “reconstituting” the board. The group of investors, which holds approximately 8.4% of the outstanding shares in the company, publicly released their letter to the board calling for these changes on October 12. The group declined to comment on this story.
The group, which includes Tyvak’s other cofounders Jordi Puig-Suari and Roland Coelho, say in their letter that the company is “operating from a position of weakness due to leadership missteps, lack of internal controls, poor corporate governance, and a loss of public market confidence.” They cite an backlog worth $2.6 billion and the company’s pitiful stock price — $0.81 as of today.
The first letter states that Williams would “welcome the opportunity to explore” returning to the company provided the changes are implemented.
The group has sent two more letters; the third letter was sent on November 9, just four days before Terran filed its lawsuit against Williams. In it, they reiterate their request to meet with the board to discuss their proposals, including discussing the CEO candidate the group identified to replace Bell.
“It is simply unacceptable that the Board has refused to meet with us and rather has decided to adopt a seemingly hostile and dismissive attitude toward us as shareholders,” the letter says. “We believe such a stance only further erodes shareholder value and market confidence in Terran.”
While the lawsuit will have to be evaluated on its merits, it’s uncommon for a company to sue an departing executive a full year later over failing to give adequate notice. Observers, such as other shareholders, may reasonably interpret the company’s actions in this context as retaliatory or punitive, regardless of the outcome.
The suit was filed in the Superior Court of California under case number 30-2023-01361218-CU-BC-CJC.
“Terran Orbital’s lawsuit against Mr. Williams has no merit, and Mr. Williams looks forward to vindicating himself in court,” Williams’ lawyer told TechCrunch. Terran Orbital did not respond to TechCrunch’s request for comment.