Forced Out: Former CEO Says Hunt Snatched Firm's Reins

by Mark Friedman  on Monday, Feb. 27, 2012 12:00 am  

Phil Phillips, in his testimony in the 2009 bankruptcy hearing, said the deal hinged on the venture capitalists finding another investor, and the deal crumbled when they failed.

Meanwhile, the company continued piling up losses, and Johnelle Hunt and Phillips questioned Muccio’s management skills.

In 2007, BioBased had revenue of $16.7 million and a loss of $1.5 million. In 2008, its revenue climbed to $21.6 million, but it still lost $965,000, according to its bankruptcy filing.

Management Dispute

Phillips said he was concerned with the way Muccio ran the company.

“I’ve argued with Tom in a gentle way, … for a long time about the expenses in the company,” Phillips said in the December 2009 bankruptcy hearing. “We need to cut expenses; we need to be [a] small company until we can be a big company. … We’re a small company and we just didn’t run it that way.”

Hunt also questioned Muccio’s management decisions on several fronts, including giving employees company credit cards.

“My people that work for me don’t all have credit cards,” she said on the witness stand during the bankruptcy hearing. “We have one credit card that everyone shares if they need to buy supplies.”

She said that she was growing tired of the losses and the lack of commitments to buy the company. Hunt said she kept hearing that the company was worth millions, but she questioned those numbers.

“We had big dreams of what the valuation should be on that company and what those patents were going to be worth and what it would be,” Hunt said. “We had all those big dreams of what we were going to make out of that company.”

Eventually, she said, the investors had to become realistic. “For so long and so many years, and you keep getting these promises, and when they never happened, you finally have to look at it and say, We’ve got a problem here,” Hunt said.

Smiley Brought Aboard

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Did the Fed make the right call on interest rates?