Brag Media cofounder and former CEO Luke Girgis has launched authorized motion within the NSW Supreme Courtroom in opposition to the corporate that purchased his enterprise, ASX-listed Vinyl Group.
The acquisition deal dates again to December 2023, when Vinyl (ASX: VNL) introduced it will pay $8 million in money to amass 100% of The Brag Media and its subsidiaries, with an additional $2 million payable in money or inventory based mostly on monetary efficiency.
On the time WiseTech World cofounder Richard White invested $11 million through his fund, RealWise Group Holdings to fund the M&A deal.
Brag Media, which publishes Rolling Stone, Selection and different titles in Australia, was considered one of quite a few acquisitions made by Vinyl in recent times. The corporate owns blockchain music startup Serenade, music credit database Jaxsta, the Tinder-style musician social community Vampr, and in December acquired writer Concrete Playground for $5 million.
Final September, Vinyl additionally acquired commerce publication Mediaweek. Its former proprietor, editor-in-chief, James Manning, departed the enterprise all of the sudden after practically 25 years, with Unmade reporting that he acquired an e mail Vinyl chief working officer Joel King telling him editorial providers had been not required, efficient instantly, informed workers within the workplace “I’ve been sacked”, packed up and left. Vinyl denied he was sacked.
In June final yr Girgis additionally departed all of the sudden, regardless of being on a two yr earn-out. On the time, Vinyl to the market his depart was results of “a radical overview of The Brag Media to unlock additional synergies and efficiencies” that might generate “$750K price of financial savings over the following yr”.
In response to the authorized motion, Vinyl issued a press release claiming: “Girgis was terminated for critical misconduct, together with however not restricted to monetary misconduct” following an exterior investigation.
“The efficiency cost was contingent on particular monetary targets being met and topic to Mr Girgis’ employment settlement not being terminated apart from for trigger or the place Mr Girgis being convicted of an indictable felony offence or any act of fraud. These monetary targets weren’t achieved by The Brag Media enterprise,” the Vinyl ASX announcement mentioned.
Grigis, now CEO of the meal supply startup Providoor, and founding father of Seventh Road Holdings, is searching for a minimum of $2 million in performance-related funds beneath the sale settlement.
His two cofounders additionally left the enterprise final yr: Sam Benjamin, shortly after the merger, and Poppy Reid, the Rolling Stone editor, just a few months after Girgis.
Vinyl claims the monetary targets set it the sale settlement weren’t achieved “regardless of Vinyl efficiently implementing operational enhancements” and “maintains that no efficiency cost is due” and its board “considers the claims have little benefit”.
The corporate mentioned it “intends to vigorously defend the claims and intends on lodging a crossclaim the place it’s more likely to be alleged that there have been breaches of the share sale settlement by the Sellers and additional misconduct which has been uncovered throughout Mr Girgis’ tenure as each an worker and director”.
Vinyl’s share worth, which has been on a tear during the last 12 months, rising practically 86%, has fallen by round 10% at the moment to $0.125
The matter returns to court docket on March 5.
