In June, Robertson sold Linspire to Xandros in a back-room deal without any shareholder input or detailed notification. Even though Robertson sold Linspire three months ago, shareholders still remain completely in the dark as to the financial details of the transaction. How does that pass any smell test for investors?
Michael Robertson - Greedy, crook or just incompetent?
At the time the deal was announced, I predicted it would take a lawsuit to ever get Robertson to go public with the details, as it was my belief Robertson's motive for this transaction was likely to hide unauthorized transactions which he may have made using Linspire's assets as his personal piggy bank to reward himself and his father-in-law as well as fund his other companies. It appears I was right in my prediction as a lawsuit has now been filed against Michael Robertson and Linspire's then-CEO Larry Kettler in an effort to force Robertson and Kettler to finally explain to shareholders what happened.
Click here for a copy of the suit with all the details of the allegations.
The lawsuit is a "derivative suit" which is a lawsuit instigated by a shareholder of a corporation, not on the shareholder's own behalf, but on behalf of the corporation. The shareholder brings an action in the name of the corporation against the parties (in this case Robertson and Kettler) who allegedly caused harm to the corporation. Such derivative suits are often brought against officers or directors of a corporation for violations of fiduciary duties owed to the shareholders vis-a-vis the corporation. The derivative suit against Robertson and Kettler was instigated by Kevin LaRue, the one-time VP of Marketing for Linspire and a current shareholder, but any proceeds of a successful action are awarded to the corporation, benefiting all shareholders, not just LaRue.
Because Michael Robertson was the Chairman of Linspire's board and apparently their only board member (shareholders have never been given notice of anyone else having been added to the board since Robertson fired all the other board members over a year ago), it would be improper for him to make deals that would only benefit him as the majority shareholder. The lawsuit alleges Robertson did not fulfill his fiduciary responsibility to not only act in his best interest but in the interest of all shareholders.
Regardless of the ultimate outcome of this suit, if nothing else, it will hopefully, once and for all, bring to light what happened to Linspire. The minority shareholders have a right to know, and it's unfortunate it has taken this lawsuit to get any information form Robertson.
If my suspicions as to Robertson's actions and motives were unfounded, why wouldn't Robertson have come forward with all the books and details long before now? What is he hiding? Why is it taking a lawsuit to bring things to light? Robertson's behavior simply enforces my belief that he was in fact taking advantage of Linspire shareholders and is doing everything he can to cover up his actions.
A year ago, Michael and I disagreed over what was best for the future of Linspire and the shareholders. I resigned and Michael got his way, insisting he knew what was best for the future of the company and that he could return more value to employees and shareholders than the plans I had proposed. So far Robertson has produced nothing of value for the shareholders and the company appears now to be gone. Is Robertson a greedy majority shareholder who navigated things to make sure he got all the assets, a crook who stole the assets, or is he just incompetent, having squandered millions in one short year?
Hopefully this suit will once and for all uncover the truth and the shareholders will finally know what happened with their investment in Linspire and Robertson.
Kevin
PS: "Xandros has done more than any company to put Linux in front of users..." ~ Michael Robertson (More than Ubuntu? Novell? Red Hat? Linspire even??? Robertson said this recently. With statements like this, you can see why I have a hard time believing anything else he says.)
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