Daniel Englander
Former Employee to Imperium: You’ve Been Served May 30, 2008 at 10:37 AM
A former Imperium Renewables employee has sued the beleaguered biodiesel company. Kenneth Orr, the company’s former managing director of trading and commodities, is suing his former employer for $12 million, seeking double damages, attorney’s fees, and interest. Orr had earned $58 million buying and selling biodiesel commodities and, according to the complaint, he was entitled to a 10 percent bonus on his trading activities that was never paid out. Prior to his firing in January 2008, Orr alleges Imperium closed down the company’s commodity trading section and transferred his bonus to a group of Imperium subsidiaries as a way to stem the company’s capital hemorrhage.
January was a tough time for the Paul Allen-back company. Within a span of three weeks, Imperium stepped back from a planned $345 million IPO, kicked out CEO Martin Tobias, and laid off most of its corporate work force. Also canned were a three plant expansion plan, of which included a signed $90 million contract with Hawaiian Electric. Imperium has responded to the lawsuit by saying Orr was fired because the company experienced a cash shortage at the end of 2007 (despite raising $213 million in VC and debt financing that year), and his operations were closed down to free up some extra capital.
Imperium fell victim to its own shortsightedness. Palm oil prices soared $153.40 in four months, while rising demand in consumer markets closer to the production sources in Malaysia and Indonesia constrained the supplies available to Imperium. Maybe closing down trading operations wasn’t such a hot idea - spot markets are dangerous places for the uninitiated. But, then again, that’s what you get when you let a former web entrepreneur run a fuel company.
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