Former CEO accuses LuxeYard of making false statements in SEC filing
Larry Thomas -- Furniture Today, November 27, 2012
LOS ANGELES — The former CEO of online retailer LuxeYard accused the publicly held company of making numerous false statements in a recent filing with the Securities and Exchange Commission, and said the falsehoods were part of an attempt to discredit him for contacting the SEC about alleged securities law violations.
Braden Richter, who was fired as CEO Oct. 23, told Furniture/Today that the Form 10-Q filing, which contained financial information for the quarter ended Sept. 30, was written to make it appear he was solely responsible for LuxeYard's financial problems.
He said those problems, which included a quarterly operating loss of $3.61 million on sales of $547,381, negative operating cash flow and a "going concern" qualification, were the result of actions taken by Amir Mireskandari, LuxeYard's chairman and interim CEO, whom he said exercised tight control over all decision-making.
LuxeYard didn't respond to a request to comment on Richter's allegations.
Under Mireskandari's watch, Richter claimed, LuxeYard repeatedly failed to fill orders from consumers or pay its vendors. The recent 10-Q said the company is being sued by one vendor for unpaid invoices, but Richter said there are many similar suits that aren't noted.
Shortly after he was terminated, Richter said he gave this and other potentially damaging information to the SEC. Once the company learned what he had done, Mireskandari and other company officials have tried to retaliate, he said.
"They have been on a mission to discredit me any way they can," Richter told Furniture/Today.
The 10-Q said the company has sued Richter, his wife Victoria Richter, and a furniture store owned by Victoria Richter, Jaxon International, in a dispute stemming from a management agreement LuxeYard signed with Jaxon on May 1.
The agreement was terminated before Bradon Richter was fired, and the suit accuses him, among other things, of a breach of fiduciary duties.
Richter said the agreement was terminated because LuxeYard didn't make the required payments to Jaxon's vendors.
He also said he's planning to sue LuxeYard for wrongful termination and slander.