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Sept. 30 — A former Mozido LLC director lost his bid to exercise alleged options worth as much as $56 million that would have allowed him to buy a 1 percent stake in the mobile payment-system maker, after a Delaware Chancery Court ruling ( Geier v. Mozido LLC, 2016 BL 321867, Del. Ch., No. 10931-VCS, 9/29/16 ).
Vice Chancellor Joseph R. Slights III said Sept. 29 that Philip Geier Jr. couldn't pursue his option claims because two entities that he was affiliated with had executed a broad release of claims in settling a New York state court lawsuit. The court found the release covered Geier given his undisputed close connection to and association with the entities.
The court also found that the option claims arose prior to the release and weren't carved out in it. “This is the classic model of a general release and the Option claims are clearly captured within this broad release language. How could they not be?” Slights wrote.
Mozido is pleased the court found that Geier's claims didn't have a basis, said the company's attorney Dean Pamphilis, from Kasowitz Benson Torres & Friedman in Houston, in a statement. The alternative would have resulted in Geier obtaining “an enormous windfall at the expense of Mozido, its employees, and its investors,” Pamphilis said.
Geier's attorneys didn't immediately respond to a request for comment.
Geier, an advertising executive, claimed that Mozido refused to honor incentive options that were promised to him in exchange for his board service (13 CARE 867, 4/24/15). Geier, who served on the closely-held company's board for about 14 months, said the options would have allowed him to acquire shares worth millions of dollars for the price of $135,000.
The company argued that the options didn't exist.
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