The following e-filed documents, listed by NYSCEF document number (Motion 001) 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 35, 37, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 54 were read on this motion to/for DISMISS. DECISION ORDER ON MOTION Upon the foregoing documents and for the reasons set forth on the record (2.10.2021) and as otherwise set forth below, the defendants’ motion to dismiss must be denied as to the breach of contract (first) and the fraudulent inducement (seventh) causes of action. The gravamen of the complaint is that the defendants removed Mr. Corbin as CEO because they did not believe he was the right man for the job to scale the company. When they made this decision, they informed all of the employees that Mr. Corbin was being replaced as the CEO and that David Pearce was the interim CEO. They removed Mr. Corbin’s access to the company server. They did not include him in any strategic decision meetings. They told him not to return to the company offices and provided him with boxes to pack up his things (Compl.,
126-140). Without question, as alleged, this constituted a termination of his role as CEO. When Mr. Corbin reminded the defendants that he was entitled to exercise his Put Rights and to receive severance under his employment agreement, the complaint alleges that the defendants did not effectuate a proper cure (e.g., id., 189). To wit, although they sent him an email saying that he was reinstated as CEO, continued to pay him his CEO salary, let him sit on the board and voted as a board to “reinstate” him, this was all allegedly smoke and mirrors for the defendants’ real objective, which was to have their interim CEO Mr. Pearce continue to perform all the functions of the CEO without having to pay Mr. Corbin his Put Rights compensation, which was due based on their termination of him as CEO and which was more than his salary. The complaint further alleges that neither the company’s clients nor employees were informed that Mr. Corbin was reinstated as CEO, nor was he otherwise fully restored as CEO of the company (id.). Among other things, the well pled complaint alleges that this purported “cure” did not include restoring Mr. Corbin’s picture and biography to the company’s website which had been removed. Nor did this so-called cure include restoring his access to the company systems, or otherwise restoring to him any duties or responsibilities befitting that of the CEO. In fact, the complaint alleges that Mr. Pearce continued as interim-CEO making all of the day to day decisions (id.). It is of no moment that Mr. Corbin’s employment agreement provided that his responsibilities as CEO could change. This simply does not mean that the company could effectively sideline him and prevent him from carrying out the role of being the CEO without recourse. Put another way, a change in responsibilities does not include undermining his status as the CEO of the company, and any purported “cure” by the defendants needed to address how Mr. Corbin was perceived by the company’s employees and clients and to otherwise remove the notion that someone else, i.e., the interim CEO, was running the show. Following this ruse, the complaint alleges that the company was stripped of its assets by the corporate defendants so that they could further avoid the Put Right compensation due Mr. Corbin and otherwise deprive Mr. Corbin of his contractual benefits (Compl.,
