Acacia Research Corp., a company that buys other companies, and its former chief executive are in a fight that involves allegations of potential misuse of corporate money.
Acacia ACTG, -1.17% on Friday announced that a preliminary investigation found that the former executive, Clifford Press, may have abused corporate funds. Press, meanwhile, sued Acacia on Friday, and Acacia said is demanding to be put back on Acacia’s board and threatening to “publicly attack Acacia and its affiliates” if he doesn’t get the severance package he wants.
Press in October said he was retiring from Acacia, leaving the company and its board on Nov. 1. In a filing later in November, Acacia said Press’s departure “was not due to any disagreement with the Company on any matter relating to its operations, policies, practices or otherwise known to any executive officer of the Company.”
In Friday’s statement, Acacia said the board had informed Press that it was aware of potential misconduct that could lead to his termination just before his resignation. The official investigation began after his departure and upon “becoming aware of a growing number of potential issues pertaining to his use of corporate funds and resources,” Acacia’s announcement says.
Acacia alleged that Press “appears to have misused corporate funds for personal use, including travel and entertainment with people not associated with Acacia.” Further, Acacia alleged, he provided inaccurate information related to some corporate expenses and made “substantial” charitable donations in his own name using company money.
Acacia said they notified Press’ representatives of those early findings over the past several weeks. And the company said they were trying to work out a severance package that “subtracted monies owed to the Company.”
Press’ representatives, the company alleged, had resisted those discussions and “have made it clear that if the Company does not submit to his demands, that he will seek to publicly attack Acacia and its affiliates.”
“He is seeking a severance package that includes, among other things, a payment that is exponentially larger than what he would have been owed in the event he had not resigned and had simply been terminated without cause,” Acacia said.
Press sued the company in the Delaware Court of Chancery, asking to be reinstated to Acacia’s board, the company said. MarketWatch confirmed that the suit was filed Friday, and attempted to contact Press’s listed lawyer.
Acacia called the lawsuit a “transparent attempt on the part of Mr. Press to distract from his apparent misconduct.” Acacia said it had filed arbitration proceedings.
Acacia shares declined 5% in after-hours trading, after closing with a 1.1% drop at $4.21. The stock had been on a run at the end of the year, increasing for seven consecutive sessions before Friday’s decline and gaining more than 15% in that time. Acacia shares declined 17.9% in 2022, beating the S&P 500 index’s SPX, -0.25% 19.4% decline.