Speculation about the board and CEO changes....
It occurs to me that if there is a Chapter 11 filing coming, there could be a fight over whether the company continues to be run by current management. Creditors might seek the appointment of a trustee to run things.
Nick presents a couple of problems in that battle. He has a very checkered past, for one thing. He seems to be rewarding himself a bit too lucratively, for another. And finally, he owes the company money for those illegal stock commissions he was paid.
So, I think the advice VEND received was to get Nick out of the CEO spot and to create a board with a majority of independent directors so that the company has a better chance of avoiding the appointment of a trustee.
I think that was smart planning. It’s of particular value to Nick if he wants to get his own payoff out of the deal, but it’s probably still for the best for the company. A bankruptcy trustee might not be able to preserve any value at all.
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