Bolt Founder Ryan Beslow Settles Investor Lawsuit by Returning $37 Million in Stock | TechCrunch - Latest Global News

Bolt Founder Ryan Beslow Settles Investor Lawsuit by Returning $37 Million in Stock | TechCrunch

Bolt founder Ryan Breslow proposed a settlement with investor Activant Capital this week that could put an end to a lawsuit brought by Activant. The investor accused Breslow of increasing Bolt’s balance sheet by $30 million through personal debt and firing board members when they pressured Breslow to repay.

Activant sued Breslow in July 2023 in a Delaware court on behalf of Steve Sarracino, a former Bolt board member, alleging that Breslow fired him and two other board members when they refused to help Breslow repay the $30 million Dollar loan to help. Sarracino’s lawsuit also alleged that CEO Maju Kuruvilla and three board members who were later appointed did not force Breslow to make loan repayments.

Breslow’s $30 million loan was secured by Bolt, but Breslow defaulted on the loan, the lawsuit said. Instead of canceling shares he owned to repay the amount, Breslow allowed those millions of dollars to be withdrawn from Bolt’s accounts, the lawsuit says.

At the time, Bolt’s board consisted of Breslow, Maju Kuruvilla (who replaced Breslow as CEO in January 2022), Brian Reinken of WestCap Management, Arjun Sethi of Tribe Capital Management, and Steve Sarracino of Activant.

In March 2023, Breslow removed them all from the board and appointed people believed to be more sympathetic to his cause, including musician Larrance Dopson, journalist Esther Wojcicki and crypto investor Brock Pierce. All three have since left the board and have been replaced by other acquaintances from Breslow.

Kuruvilla himself was later removed as CEO in March 2024 and replaced by Bolt sales manager Justin Grooms.

Concurrent with the Activant lawsuit, the U.S. Securities and Exchange Commission was investigating Bolt and Breslow in connection with whether federal securities laws were violated in connection with statements Bolt made during its 2021 fundraising.

This was revealed in a letter that Reinken and Sethi, who were Series C and B investors respectively, sent to Bolt’s legal counsel as part of a request to see the company’s records.

The letter alleged that Breslow “misled” investors when he raised funds for the company’s $355 million Series E funding round, valuing the company at $11 billion. The investigation against Bolt was later closed.

Neither Breslow nor an Activant representative responded for comment at the time of publication.

According to the settlement plan seen by TechCrunch, Bolt will now cancel 13,397,270 shares of common stock previously owned by Breslow, equivalent to $37,378,383. Breslow essentially returns these shares to Bolt to pay off the principal loan, costs and interest.

On Activant’s side, the company said it had decided not to participate in a tender offer and that Bolt would instead buy back 18,247,337 of Activant’s shares, valued at $36,494,674.

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