Friday, September 17, 2010

Jury Vindicates Former Linspire Employees of 3-Years of Attacks by Michael Robertson!

Once again, Michael Robertson's bullying has been put to an end
by the greatest legal system in the world. Yesterday, a jury vindicated
four former Linspire employees who were being wrongly abused and
attacked by Michael Robertson. He knew these employees had
done nothing wrong, but used them as innocent pawns in his attacks.

Many of you who follow my blog do so to keep tabs on the litigious antics and bullying of multi-millionaire Michael Robertson. You also know that I started blogging about Robertson only after he started attacking former Linspire employees who I knew to be honest, good people. I've never had any problem with Robertson disagreeing with me or what I did as CEO for Linspire. It was his attacking these blameless employees that bothered me. Those employees deserved being stood up for as Robertson tried to roll over them.

When asked why he was attacking all these good people, Robertson would say, "Just wait until I get my day in court. You'll see the truth." Well, Robertson not only got his "day" in court, but he got three weeks, and we now do have the truth. Yesterday, after being in the court house for three weeks, the jury returned their verdict. Read on....

Quick Summary of the Case

Three years ago
, I was the CEO for Linspire. Michael Robertson had stepped down two years earlier, and had virtually no involvement in the running of the company since. However, after the Linspire employees brought in a VERY profitable year, Robertson suddenly decided he wanted to be involved. He first asked me to have Linspire transfer $1,000,000 to himself and $500,000 to his father-in-law, the two preferred shareholders. I explained to Robertson that he couldn't just take money out of the company like that, and that there were around 100 other shareholders to consider. If he wanted a distribution, the company would need to offer it to ALL shareholders, not just Robertson. I then came up with a stock-buy-back plan which would have gotten his father-in-law the $500,000 Robertson wanted him to get, BUT in a legal, fair and equitable way, taking ALL shareholders into account.

Robertson rejected my stock-buy-back proposals. I believe he realized that the only way he could get his hands on the majority of the money (without having to share any with the other shareholders), was to run the company into the ground, liquidate it, and then he and his father-in-law, as preferred shareholders, would be first in line to get paid from any liquidation proceeds. (Which is exactly what he did, and in ten short months, millions of dollars from the company magically disappeared and the company was sold. To this day, shareholders have been given no accounting as to what happened.)

Robertson next wanted me to lay off several long-term, dedicated Linspire employees with only two weeks of severance (even though they had just turned in an VERY profitable year). I refused and told Robertson I wanted no part in such a selfish act. I told Robertson that I wouldn't come into work the coming week so that he would have plenty of time to fire me, take the CEO position back, and then fire the employees as he saw fit. Robertson never did fire me or any of the employees, but rather, called me a week later insisting I come back to the office and do his dirty work, fire the employees, give them two weeks of severance, and transfer $1.5 million to him and his father-in-law. Again, I refused, this time telling him I would return to work and execute the layoffs, but that I would give the employees a fair and reasonable severance, not the two weeks he wanted. That is exactly what I did. I returned to the office and laid off the employees, giving them what I believed was the correct severance. As came out in court, as the CEO, I did intentionally navigate the situation to prevent Michael from stepping in and harming these employees (for which the Jury awarded some small damages against me). I stand by my authority as CEO to have taken the actions I did, and I am glad to have protected these good employees. When I laid the CFO off, he even agreed to take less in severance than he was due based on his employment agreement, which more than offset the additional severance I awarded the other employees, in essence, saving the company money AND treating the employees fairly.

Robertson, upset by my actions, absolutely refused to talk or meet with me (even after repeated attempts by me to meet with him to explain all that had happened), but instead, set about attacking me and the laid off employees at every possible turn. He did many despicable things to these employees, including filing a lawsuit, accusing the former employees of fraud, conspiracy, etc. simply because they were laid off and given severance by me, the CEO. The complaint asked for $318,000 in damages from the employees. The six employees involved were two VPs, one Team Lead, the Controller, the CFO, and myself (the CEO). The only one Robertson should have gone after was ME. I am more than happy to accept any judgment against me IF I did in fact do anything wrong, but I will never forgive Robertson for having gone after employees HE KNEW did nothing wrong. Dragging them into this was disgusting and shows exactly what kind of person he is.

The Jury's Verdict

As hoped, the jury completely vindicated the employees he dragged into this. As you'll see, they did find me responsible in a few areas and awarded a small amount of damages.

Here is what the jury found...

VP #1 - Not liable on all counts and gets to keep all of his severance.

VP #2 - Not liable on all counts and gets to keep all of her severance.

Team Lead - Not liable on all counts and gets to keep all of his severance.

Controller - Not liable on all counts AND Robertson was ordered to pay him $72,500 in damages. (The controller had an employment agreement for six months of severance which Robertson had previously refused to honor.)

The only thing that went Robertson's way was that I (CEO) and the CFO were found responsible in a few areas, and Linspire was awarded a small amount of damages from us (equivalent to about four months worth of the CFO's severance), but the damages were far from what Robertson wanted so the jury definitely didn't agree fully with Robertson's side of things. I still believe everything I did was within my authority as CEO, and the CFO did absolutely nothing wrong, as he was simply following my directions (which his employment agreement told him to do). So...

CFO - As I mentioned, he had an employment agreement for two years of severance, but Robertson wanted him to get only two weeks, later moving that up to 2.5 months (in trial he requested the CFO get NO severance). The CFO, however, agreed to accept only 12 months of severance when laid off, saving the company the other 12 months of his severance. The jury ruled that the CFO could keep all of his severance, but awarded damages to Linspire which equated to about 4 months of the CFO's severance. (Even though the CFO essentially ended up with 8 months of severance, well above the 2.5 months Robertson wanted him to receive, we are considering a post trial motion given that he had an employment agreement for two years of severance and was terminated without cause.)

CEO - Like the CFO, I too had an employment agreement giving me two years of severance. However, after laying off the employees, I freely resigned and walked away from my severance, wanting nothing more to do with Robertson. The jury found me responsible for the same items as the CFO and ordered that I be joined in those same minor damages.

The Bottom Line

Needless to say, I was THRILLED with the jury's verdict. Robertson attacked these good employees, out of spite, greed and ego, and wound up with essentially nothing but a big pile of legal bills. I have never cared what judgments came to me--I have always been prepared to live with any of the consequences of my decisions as CEO--but to see the employees vindicated was great. It's been a long three years of Robertson attacking these good people and blemishing their reputations. It was nice to see their names cleared.

So, the bottom line? As per the complaint, Robertson wanted to 1) take away ALL the severance from ALL the employees and be awarded $318,000 AND 2) not be forced to pay the Controller his severance of $72,500. After the jury's verdict, Robertson will end up netting only $8,833, all while having spent, I'm sure, hundreds of thousands in legal bills (ouch!) and quite likely being liable for more, since all the employees who were found not having done anything wrong are of course asking the judge for statutory indemnification and legal fees. It's certainly not fair that these faultless employees should have to pay their legal bills for just defending themselves against Robertson's baseless attacks.

Far more important than the financial victory, however, is these former employees have their good names back! Justice was served!

There were a lot of interesting things to come out of the trail such as why Robertson has never told the shareholders what happened to their investment in Linspire, how he feels about common shareholders who he called "second class" from the witness stand, the many despicable measures Robertson took in attacking these former employees, and much more. I will do a follow-up blog with some of these details, but for now, I just wanted to share this wonderful news and take some time to enjoy this favorable outcome.

This is the third loss Robertson has suffered in the courts relating to the layoffs. He lost against his bank Comerica and also against the gripe site At least his lawyers are doing very well. =)

Thank you's

Thanks to my co-defendants. We have all grown closer together having had to go through this. You have all been wonderful, and as I said, I couldn't be happier for you with the outcome. (Pool party? =)

I want to thank the AMAZING lawyers Gil Cabrera and Greg Goonan who did such a wonderful job at representing us. More important than the outcome, as defendants, we were all so very proud of the way these fine men conducted themselves. There were actually points in their closing arguments that brought many of us to tears, as they advocated for us and the truth. If you ever need a great lawyer, these two are the best!

I want to personally thank all the jury members who had to spend THREE WEEKS of their lives in the court house dealing with this. America has the best legal system in the world, and at the center of it is our jury system. Thank you from me and all the defendants in this case!

I don't know if it's appropriate, but I have to do it, a BIG thanks to Judge Timothy Taylor. I was SO impressed with how he conducted every minute of this case. There was one part where Robertson's lawyer was hammering away at me, trying to make me look guilty because I couldn't find something in a document, but the Judge DID find it and pointed it out. I don't thank him for that, I thank him because he would have done the same for the other side. He is truly a wonderful example of what a smart, fair, and just judge should be. He WAS the smartest man in the room, as it should be.

Lastly, I want to give a special thanks to the many friends and former employees who showed up at the court house to support us these past few weeks! Seeing you there in support was greatly appreciated by me and the other defendants. It was so touching to have received so many emails, not only wishing us all the best, but actually saying you were "praying for us" and that the truth would come out. Thank you from all of us for those prayers. They were answered.



Scott said...

Congratulations to those employees who finally have closure to this whole, unfortunate episode. Robertson is pathetic for having gone after the other employees.

Anonymous said...


Glad to hear things went reasonably well. Even though the jury passed partial judgement against you & the CFO, it seems you'd rather live with a clear conscience instead of worrying about a point of business law.

That you protected the employees of Linspire from Robertson's money-grab with fair severance packages was very generous & honorable of you.

I do have two questions.

1. Is this the end of Robertson's legal antics or does he have other suits pending?

2. Where do things stand regarding the other 100 shareholders? Are there other motions pending to uncover the truth about where all that $$ went?


Larry P.

Kevin Carmony said...

Larry P:

1. Not sure there will ever be an end to Robertson's legal attacks. As with many rich bullies, they love using the court system to hammer away at people, even if they have no valid case. Fortunately, he's lost at every turn and I'm sure will continue to, but I suppose he has the money to waste on it. He lost in the Comerica case, and I believe that's completely over. He lost in the case, but he is appealing that. He'll just waste more money there, but I'm not spending a dime on that one. I have no idea if he'll appeal this latest case, he may still want to bully these good employees. Let's hope not. If he does, it just further shows what kind of person he is. I am still a witness in the EMI lawsuit, where he's once again being sued for copyright violations (same thing he did to harm

2. As for the 100 Linspire shareholders, they remain in the dark. From the witness stand in this latest case, Robertson said that common shareholders were "second class," and didn't put in "real money" like he had. When asked why he hadn't communicated with the shareholders about what happened, he said, "I've been told I'm not legally obligated to do so." It also came out in this latest trial that Roberson DID transfer all the money that was left from Linspire to one of his accounts and to his father-in-law. To the extent of exactly what happened and where the millions went, Robertson seems hell bent to take that to the grave with him. He argued that the reason he wanted to give the employees lousy severance was to keep as much money in the company as possible to give it a chance to succeed. Well, we see how well that turned out. Ten months after we all left, the company was gone and he took all the money remaining. Anyone thinking of investing in one of Robertson's ventures or exercising stock options in any of his companies should pay attention to how he treats minority shareholders.


Scott said...


I'm curious. During the hearing, did any former employees show up in the courtroom to support Robertson?


Kevin Carmony said...


Not that I could ever see. I never even saw Robertson's wife there the entire two weeks.

As I mentioned, several people, including former Linspire employees, did show up in support of the defendants. (Thanks!)

I'll also add that Robertson didn't show up to hear the verdict read, but all six of the defendants were there.


Zebro said...

Very interesting. Great to hear that justice was served for the most part. Congrats!

Andy L said...

Great news!

Kevin, I watched the new Wall Street movie tonight, and I couldn't help but think about Robertson as it highlighted scummy businessmen. There was a great line where the scummiest of the businessmen was told, "I'll make you a deal, if you stop lying about me, I'll stop telling the truth about you." That made me think of your blog and how just telling the truth about Robertson makes him look bad and exposes him for the creep he is.

Keep up the good fight.


RM said...

Did Robertson ever apologize to Cliff, Theresa, Randy and Bill? Is he going to pay their lawyer fees, or will they be stuck with those?

Kevin Carmony said...

Robertson? Apologize? That's a good one. =)

Those employees were simply pawns in Robertson's game. Those who have worked around Robertson knows how he treats employees. I haven't seen Robertson care about anything other than himself, money and his massive ego. He doesn't care how many good, innocent employees he drags through the mud to try and get his way. So, no, don't look for any apologies from him.

Anyone who knows Randy, Cliff, Theresa and Bill know that only a real jerk would have innocently attacked them.


Anonymous said...

I feel pretty bad for the people that are still putting up with his abuse by continuing to work for him. They need a support group. He fails to realize that his attitude (that he believes to improve performance) only leads to his employees wasting hours on end ridiculing his decisions, fuming, and conspiring against him.

Hopefully potential future employees of his will trust in the caution imparted on Freespire and this blog and understand fully that picking strawberries is better than working for him.

Thanks for keeping the flame lit, Kevin. (though perhaps that praise should be dubiously given to Michael and his zeal for litigation?)

Anonymous said...

Enjoyed reading/following your page.Please keep it coming. Cheers!