Management at Colorado Springs-based Spectranetics Corp. probably didn’t have a very relaxing Memorial Day – the company is mired in infighting resulting in the firing of two senior executives and is caught up in a lawsuit asserting the former employees conspired to replace the company’s chair to take control of the firm.
The lawsuit filed Friday alleges Joseph Largey, the fired chief executive officer who had five years with the company, and Paul Samek, fired from his chief financial officer post, had conspired with other shareholders for a period of time to garner enough support to oust company Chairman Emile Geisenheimer.
About two weeks ago, Spectranetics delayed its June 4 shareholders meeting to give shareholders additional time to consider the firing of Largey and Samek.
The suit could bust up a dissident shareholder’s labors to remove two board members by keeping him and others from voting their shares on company matters. It could also temporarily stop solicitation of other shareholder votes.
Additionally, the lawsuit alleges Largey and Samek did not file required Security and Exchange documents in time, and when they were filed, they were allegedly misleading. SEC rules require documents outlining plans to change company leadership be filed within 10 days of the time shareholders make the decision.
The suit alleges Largey and Samek had worked for some time with dissenter shareholder Steven Sweet to importune additional shareholder votes to replace Spectranetic’s board.
Attempts to reach Largey and Samek were unsuccessful. Largey’s telephone number has been disconnected, and Samek has an unpublished number.
Company officials said the firings are the result of frequent disagreements with the pair and the board of directors about how the company should operate. The suit alleges Samek and Largey apparently knew the axe was about to fall, and organized ways to oust those people before they were fired.
“The board has long had some frustration over Mr. Langey’s and Mr. Samek’s lack of willingness and commitment to the board’s policy of maximizing shareholder value through continuous growth in profitability,” chair Emile Geisenheimer said. “We believe we have a strong base today to build to the next level of success, and we’re convinced we’re not going to get there under (their) leadership.”
Geisenheimer will head the company until permanent replacements are found. No large-scale changes are expected because of the shakeup, he said.
Both of the fired executives were given opportunities to implement the board’s direction, said Geisenheimer. “This is an issue we’ve wrestled with for months,” he said.
Earlier this month, Largey and Samek announced their intentions to work with Sweet to get enough votes to remove Geisenheimer, along with board member John Schulte, both of whom are up for reelection this year. Shortly thereafter, the two were fired. Their defense is that they were fired because of their support in replacing the board members.
Another executive at Spectranetics is Sweet’s sister Sharon, who is now on paid administrative leave.
Spectranetics stock sells for about $2.91 per share, down from about $20 a share after the company’s initial public offering.
After posting losses for years, Spectranetics has posted profits in each of the past four quarters.
The company employs about 140 people. It develops lasers used to break blockages in arteries. It was founded in 1984.