Attorneys for the chief financial officer of a merchant cash advance company accused of fixing finances said a former general counsel does not have standing to file a shareholder derivative suit because he had his shares repurchased.

In December, Steven Berkovitch filed suit against Oded Segev, the CFO of Delaware-based Five Hole, claiming breach of fiduciary duties, unjust enrichment and conversion. Specifically, Berkovitch, who was the general counsel for Pearl Capital Business Funding, a company owned by Five Hole, created a law firm, Berkovitch & Bouskila, to make collections for the company and for other companies looking to outsource the work as a way to bring himself and Pearl Capital more revenue. Berkovitch also had a small stake in the company.

Berkovitch claims the company did not pay him bonuses that were promised and Segev was fixing the books in order to give bonuses to executives. In December, Segev filed a motion to dismiss and Berkovitch filed an amended complaint in January making the same allegations.