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

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

Smiley told Muccio in a shareholders’ meeting that the company didn’t have money to pay its bills. The only options were to shut down or file for bankruptcy protection, so Muccio voted for Chapter 11 reorganization.

“It seemed like the only alternative to preserve the interests of all of the shareholders and allow the company to continue to work its way into profitability,” he said.

Hunt also said she voted for bankruptcy because it was “the best choice to keep this company in operation.

“It was a hard decision for me,” she said. “I did not want to be associated with bankruptcy. Because of the position I’m in, I didn’t feel like it … looked good for our family.”

After the company was in bankruptcy protection, Muccio began to believe that he had been misled about the health of the company. He said the company needed his vote to move it into bankruptcy.

He said later he learned that there was $600,000 in a bank account. He said that money could have been used to cover the company’s bills.

BioBased listed $13 million in debts and $2.8 million in assets.

In bankruptcy, Hunt proposed that her company buy the assets for $2.8 million.

Muccio tried to block the move in bankruptcy, saying the value was too low, especially for the intellectual property, which was listed as having zero value.

Bankruptcy Judge Barry said he didn’t think the value was too low. He said the intellectual property was worth something but he just didn’t know how much.

Barry approved Hunt’s plan, which left the Muccios with about $45,000 from their $1.2 million investment in BioBased.

Phillips also said he lost his investment in BioBased. “My whole life’s hope was in this company and Mr. Muccio,” Phillips said. “I thought it was worth $50 million, but it’s not.”

 

 

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