Braidy Industries alleges former CEO Craig Bouchard misused company funds

In response to a lawsuit filed by former CEO Craig Bouchard, Braidy Industries alleged that Bouchard misspent about $333,000 on travel and meal expenses for himself, chartered unauthorized private planes and awarded himself bonuses, all in violation of company policy.

The company’s findings come after its chief financial officer conducted an internal investigation that uncovered several “red flags” over Bouchard’s spending, including that Bouchard allegedly conducted legal work for himself and billed the company, and used Braidy’s American Express card to charge personal expenses on trips abroad, according to the company’s court filing.

Bouchard sued the company earlier this week in hopes of regaining control. He was ousted as board chairman and CEO late last month, but disputed the legitimacy of their actions in a lawsuit filed in Delaware.

On Feb. 3, about a week after the board removed Bouchard as CEO and board chairman, they informed him that he had been placed on administrative leave, with pay, until further notice, according to the company’s filing.

Braidy also informed him that it had “identified certain financial and operational irregularities in connection with your role as Chief Executive Officer that warrant investigation.”

It ordered him to remain away from company premises, and to not attend meetings related to the company.

Chief Financial Officer Julio Ramirez told the board he was concerned with Bouchard’s apparent misuse of funds, “violation of Company Policy, use of a questionable capital raise advisor, undisclosed related party transactions, poor judgment and other decisions that worsened the Company’s financial liquidity situation, and misrepresentations to the Board and other stakeholders.”

The company has since hired outside counsel to further investigate Bouchard’s spending. According to its response in court, the company expects the investigation to “prove self-dealing and other wrongful conduct by Bouchard” within the next 60 days.

Braidy agreed with the decision to conduct the lawsuit on an expedited basis, but asked the court to delay the trial until May 13.

Braidy also filed numerous photos of Bouchard on trips abroad, alleging that he was improperly using company funds during the expeditions.

In a Facebook post, Bouchard called the allegations “defamatory and slanderous,” and said the company’s CFO had approved all his expenses on a monthly basis since the company’s founding.

“Now, a month after my removal they have made outrageous deliberate inaccurate suggestions about my expenses unsupported by facts,” Bouchard said. “I’ve never had an unauthorized expense.”

Bouchard’s suit alleged that he had lined up hundreds of millions of dollars of investment for Braidy prior to his removal, and that the sudden change in leadership would jeopardize those investments.

Braidy officials told Kentucky lawmakers last week that the company still needed $500 million before it could begin construction on an alluminum mill in northeastern Kentucky. That was the same figure estimated in the company’s 2018 SEC filings.

Bouchard named company board members in his lawsuit, but also two investment companies, including a state-sponsored investment firm that put $15 million of taxpayer money into the company in 2017.

Commonwealth Seed Capital, the Kentucky firm, said it did not comment on ongoing litigation.

A copy of Bouchard’s flight record, which he provided to the Herald-Leader, shows that he traveled abroad several times, including to Dubai, Moscow, New Delhi, Riyadh and Tokyo.

The company, in its court filings, posted photos of Bouchard with his daughter on trips abroad. Bouchard said he personally paid for her expenses.

Over a 171-day period last year, Bouchard said he flew 135,000 miles and spent 99 days on the road in hopes of attracting investment opportunities for the company. The majority of those flights were economy class, he said.

“I’m constantly looking to lower expenses,” Bouchard said. “These people will each be held accountable for their defamatory and slanderous actions.”