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1Vector Launch alleges former CEO mismanaged Tucson company 
2By Hayley Ringle
3Reporter, Phoenix Business Journal
4Dec 30, 2019, 10:00am MST
5Updated Dec 30, 2019, 1:40pm MST
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7As Tucson-based Vector Launch Inc. goes through Chapter 11 bankruptcy protection, the micro satellite launch startup alleges in court filings that co-founder and former CEO Jim Cantrell mismanaged the company.
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9Vector’s lawyer, Joseph Kroeger, a labor and employment partner with Snell & Wilmer’s Tucson office, wrote Cantrell “breached his fiduciary duties to Vector and engaged in self-dealing,” in Vector’s filed response to Cantrell’s lawsuit filed Sept. 20 in Pima County Superior Court.
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11Kroeger wrote in the filing Cantrell “took actions in his role as a director and executive officer of Vector that were" "beyond the powers" and "detrimental to Vector.”
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13The Nov. 18 lawsuit response/counter claim also claims Vector does not owe Cantrell $165,000 in severance pay because “there is a good faith dispute as to the amount of wages Vector may owe (Cantrell), if any.”
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15According to court filings, Cantrell expects Vector should be required to pay $495,000, which is “triple the actual amount of wages owed” to him under Arizona labor law because of Vector’s failure to pay him “without a good faith dispute as to the amount of wages due.” He also wants interest, costs and attorney’s fees from Vector.
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17Vector’s response said Cantrell’s claims are “barred by the doctrines of waiver, estoppel, laches, and/or unclean hands.” This means that they want the court to "deny relief" to Cantrell because he has "unreasonably delayed or was negligent in asserting a claim," according to USLegal.com.
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19Vector filed for Chapter 11 bankruptcy protection on Dec. 13. The fast-growing startup had raised at least $91 million in capital from a number of investors, was on an IPO trajectory and was being lauded by state leaders as a promising Arizona company that could garner big funding rounds.
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21While the company had financing issues stemming from venture capital firms that opted out of investing more in the company, Vector’s lawyers and board members differ significantly with Cantrell on what led up to the bankruptcy.
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23What is undisputed is the decision by Sequoia Capital not to invest more money in Vector that ultimately led to other investors bailing out. Sequoia Capital also had its partner Bill Coughran resign from Vector’s board, according to people familiar with the company’s challenges.
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25In a statement earlier this month, Sequoia Capital officials said its decision to end investment stemmed from Vector not meeting its "strategic objectives and financial projections."
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27In response to Vector's claims against him, Cantrell said Dec. 27 that "it's easy to make these claims."
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29"Nobody made any of these accusations when I was there," as the Vector CEO, Cantrell told the Business Journal. "This amounts to people I had previously demoted to cast me in a bad light. They failed to finance the company after I left and know they don't want to pay me what I'm owed. They enjoy discrediting me."
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31Shaun Coleman, a Vector board member, co-founder, investor and director, said the company “cannot comment on any ongoing or pending legal matters at this time.” Coleman was previously Vector’s chief marketing officer.
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33Coleman referred the Business Journal to the lawsuit answers/counter claim as Vector’s official response to Cantrell’s lawsuit.
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35John Garvey, a Vector co-founder who became CEO when Cantrell left the company in August, deferred questions to Coleman. Garvey has served as the company’s chief technology officer and president of launch services.
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37Garvey’s California company, Garvey Spacecraft Corp., was acquired to start Vector in 2016.
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39Cantrell alleges in court filings he was “terminated without cause” on Aug. 9. Because of financial issues, Vector laid off a majority of its 180 employees in August, including Cantrell.
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41In his response, Vector’s lawyer wrote that Cantrell “materially breached some or all relevant contracts with Vector, thereby relieving Vector of any obligations owed thereunder.” The lawyer also wrote in the counter claim, “Vector properly withheld portions of (Cantrell's) wages."
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43Cantrell claims he had found an alternate financing loan from an existing investor that he says could have saved the company.
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45In a previous statement, Coleman said the company “strongly disputes the statements and mischaracterizations” made by Cantrell in the Business Journal’s Dec. 20 article that first reported on the company's financial issues and the decision by Sequoia Capital to pull back from the company.
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47Separately, Tucson-based Rincon Etal Investments Inc. also is suing Vector in Pima County Superior Court alleging securities fraud, according to a court filing.