NEW: “Tim Sheehy Hit with Lawsuit for Allegedly Defrauding Former Employees of Millions”
FOR IMMEDIATE RELEASE
Thursday, May 23, 2024
CONTACT
rehm@mtdems.org
Helena, MT – Today, The Montana Independent reported that Tim Sheehy and his brother may have “defrauded two former employees out of a share of their company that is worth millions, according to a lawsuit filed in Gallatin County District Court.”
Two former Sheehy employees filed the lawsuit in early April, which alleges that the Sheehys “forced” them “to accept a buyout for their shares in the holding company, presumably for far less than they would have received had they retained shares of Ascent and Bridger Aerospace.”
Read more below:
The Montana Independent: Tim Sheehy hit with lawsuit for allegedly defrauding former employees of millions
May 23, 2024
Richard Manning
Republican Senate candidate Tim Sheehy and his brother defrauded two former employees out of a share of their company that is worth millions, according to a lawsuit filed in Gallatin County District Court.
The former employees’ complaint sharply contradicts the story that Sheehy has told about himself and his business career on the campaign trail.
“You know, we were literally just broke starting our company, and I couldn’t pay our employees for the first two years, so we gave them shares in the company – equity in the company,” Sheehy said at a campaign event in Glasgow. “I said, hey, it’ll be worth something someday. Luckily, we went public and sold a division very successfully. So all those 22-year-old MSU (Montana State University) interns are now 28-year-old millionaires, so it worked out for them.”
Not all of them, however, according to the lawsuit. At least two of those employees —- and perhaps as many as seven — agree with the part about not being paid, but sharply disagree that the deal worked out for them. Former Sheehy employees John Wantulok and Weston Irr filed the lawsuit in early April before Judge John C. Brown.
The 17-page complaint alleges that the Sheehy brothers executed a shell game involving the equity of three companies the brothers controlled: a holding company, Bridger Management, and two subsidiaries, Ascent Vision Technologies and Bridger Aerospace. The last of those remains Tim Sheehy’s base of operations, and recent filings with the Securities and Exchange Commission have shown Bridger Aerospace is in financial peril because of an excessive debt load. The facts underlying the new lawsuit, however, predate those troubles.
The complaint alleges that Wantulok and Irr went to work for the holding company, Wantulok in 2015 and Irr two years later, but both under similar circumstances. Wantulok, an engineer, began the job as an intern while he was still a student at MSU. Irr took a salaried job at Ascent but moved to Bridger Aerospace.
Working under signed operating agreements, both accepted reduced salaries, just as Sheehy has publicly claimed. They agreed to work unpaid overtime after hours, on weekends and on holidays in exchange for Class C stock in Bridger Management, the complaint alleges. Both were told not to discuss that arrangement with other employees, the court filing says.
“When Plaintiffs would inquire about their ownership interests with the Sheehy Defendants or those acting on their behalf, Plaintiffs were repeatedly assured that their ownership interests were increasing, that the interests were ‘worth millions’ and that the Plaintiffs would be ‘taken care of,’ but Defendants refused to provide detailed information relating to Plaintiffs’ ownership interests,” the complaint alleges.
The complaint implies that the two named plaintiffs were not alone in this arrangement. It adds five John Doe plaintiffs to the case and says information developed during the proceedings will identify those people.
The damage to the plaintiffs is alleged to have occurred during a series of events ending in June of 2023, when the Sheehys dissolved Bridger Management, the holding company. Shortly thereafter, the Sheehys sold Ascent Vision, which developed and built drones, for “roughly $350 million,” and took Bridger Aerospace, an aerial firefighting company, public with a valuation of “roughly $860 million,” the complaint says. Those are the events that Sheehy claimed had made his employees wealthy.
The complaint, however, alleges that before dissolving the management company, the Sheehys forced both Irr and Wantulok to accept a buyout for their shares in the holding company, presumably for far less than they would have received had they retained shares of Ascent and Bridger Aerospace.
“Defendants never provided a legal or contractual basis for forcing Plaintiffs to sell their ownership interests in Bridger Management. Defendants never provided a legal, contractual, or financial basis for the valuations of Plaintiffs’ ownership interests in Bridger Management. Plaintiffs did not agree to the sale of their ownership interests of Bridger Management or agree to Defendants’ valuations of their ownership interests,” the complaint says.
Meanwhile, Tim Sheehy saw a windfall profit from that sale, personally earning about $75 million, according to Bloomberg News. He launched a real estate buying spree shortly after the sale, during which he picked up thousands of acres of ranch land near Martinsdale, a seven-acre peninsula that includes a resort called Bird Point at Flathead Lake, and a luxury home at Big Sky, a destination ski resort. Altogether, these are valued at between $7 million and $35 million and generate as much as $1 million a year in income, according to his official financial disclosures.
Sheehy’s campaign did not respond to multiple emails seeking his response to the lawsuit.
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