Bolt's proposed $450 million round would see the young founder return to the company as CEO.
Bolt and its cofounder Ryan Breslow were dealt a series of stinging remarks from a Delaware judge last week, during a hearing to continue a temporary restraining order on the company’s controversial $450 million funding round. The halt on the Series F financing was requested by a trio of irate Bolt investors including the world’s largest asset manager, BlackRock, and has been extended through mid-October.
It is the latest snag in Breslow’s ongoing bid to raise fresh capital for the struggling payments company. The round, which was first announced in August and would value Bolt at $14 billion, has already been hamstrung by a series of complications that have infuriated shareholders, among them a mixup over the name of its lead investor, and inaccurate claims made by Breslow about who had signed up for the deal. Three weeks ago, a Delaware court approved the restraining order, which Bolt has since tried to lift.
“It's a return of the king for Ryan Breslow,” said Skadden attorney Cliff Gardner, representing BlackRock, Hedosophia and Untitled Ventures during Wednesday’s hearing, according to a Delaware Court of Chancery transcript obtained by Forbes. As previously reported by Forbes and others, the unorthodox deal would see Breslow reinstated as Bolt’s CEO and afford him a large number of benefits, such as a $2 million closing bonus, $80,000 per month for travel and security expenses and a preemptive right to purchase all shares issued in future rounds.
“It should come as no surprise to anyone that I am concerned about an allegation that stockholders of a Delaware corporation are being subject to coercion.”
The terms of the deal, which gave investors just days to buy into the pay-to-play round or see 70% of their shares effectively wiped out, were characterized by Vice Chancellor Nathan Cook as a “prisoner’s dilemma,”........