Bolt founder Ryan Breslow this week proposed a settlement with investor Activant Capital that could end the lawsuit filed by Activant. The investor accused Mr. Breslow of adding $30 million in personal debt to Mr. Bolt's balance sheet and firing board members who urged Mr. Breslow to pay it back.
In July 2023, Activant replaced former Bolt board member Steve Saracino after Breslow and two other board members refused to help Breslow repay a $30 million loan. He filed a lawsuit in Delaware court over his dismissal. Mr. Saracino's lawsuit also alleges that CEO Maju Kuruvilla and three subsequently appointed directors failed to force Mr. Breslow to repay the loan.
The lawsuit alleges that a $30 million loan to Mr. Breslow was secured by Mr. Bolt, but that Mr. Breslow defaulted on the loan. Instead of canceling the stock he owned to repay the amount, Breslow allowed the millions of dollars to be removed from Bolt's account, according to the complaint.
At the time, Mr. Bolt's board of directors included Mr. Breslow, Maju Kuruvilla (who succeeded Mr. Breslow as CEO in January 2022), Brian Reinken of Westcap Management, and Arjun Kuruvilla of Tribe Capital Management. It consisted of Mr. Sethi and activist Steve Saracino.
In March 2023, Breslow removed everyone from his board of directors, including musician Larance Dopson, journalist Esther Wojcicki, and cryptocurrency investor Brock Pierce, who he deemed more sympathetic to his ideals. was appointed. All three subsequently left the board and were replaced by other acquaintances of Breslow.
Kuruvilla himself was subsequently fired as CEO in March 2024, and replaced by Justin Grooms, Bolt's head of sales.
At the same time as the Activant case, the U.S. Securities and Exchange Commission has filed a lawsuit with Bolt regarding whether he violated federal securities laws related to comments he made during a 2021 fundraising. They were investigating Mr. Breslow.
This stems from a letter that Mr. Reinken and Mr. Sethi, Series C and B investors, respectively, sent to Mr. Bolt's general counsel as part of a request to inspect the company's records.
The letter alleges that Breslow “misled” investors during the company's $355 million Series E round of financing, valuing the company at $11 billion. The investigation against Bolt was later dropped.
Neither Breslow nor representatives of Activant responded to requests for comment at the time of publication.
According to the settlement plan seen by TechCrunch, Bolt will cancel 13,397,270 shares of common stock previously owned by Breslow, valued at $37,378,383. Breslow will essentially be returning those shares to Bolt to settle the principal loan, expenses and interest.
On Activant's side, the company chose not to participate in the tender offer and instead announced that Bolt would repurchase 18,247,337 Activant shares worth $36,494,674.