)
Video technology innovator Atomos (ASX: AMS) has settled a long-running dispute with former CEO Estelle McGechie in a move that the Melbourne-based company hopes will put to bed a turbulent two-year period for the group.
Atomos says it has reached a financial settlement with McGechie, the company’s former chief product officer who was appointed CEO in September 2021.
Just seven months into the job, in April 2022, Atomos sacked the US-based McGechie – alerting investors to her departure via a brief ASX announcement in which it cited her failure to relocate to Australia as the reason.
However, four months later, the company revealed that McGechie had filed an “employment related” lawsuit against it in the US.
The claim, filed in the Superior Court of California, included a number of allegations against the company, including gender discrimination, sexual misconduct in the workplace and securities fraud, while also painting Atomos as an “insidious boys club”.
At the time, Atomos said it would “vigorously defend” the allegations.
In September 2022, Atomos hit back with its own filing in the Supreme Court of Victoria alleging that McGechie had breached a loan agreement relating to her employment at the company. The loan was forwarded as a deposit for a home the former Apple developer was buying in Melbourne ahead of her move to Australia.
Atomos today announced that following mediation, both parties have entered a confidential settlement agreement in which neither party admits liability. The settlement includes mutual releases for all claims relating to the matters.
While financial details of the settlement with McGechie remains under wraps, Atomos had made a $1.1 million provision in its FY24 accounts for the legal claim.
The company says this provision is “sufficient to meet all payments relating to the settlement payment amount and all future legal expenses relating to the matters”. Atomos also notes that it has access to sufficient capital to meet its obligations under the settlement.
“This is a very positive outcome and marks another key milestone in our journey to re-build the business,” says Atomos co-founder and CEO Jeromy Young, who stepped back into the CEO’s chair in January this year after exiting the business in 2021.
“With these matters now resolved, the clean-up of issues negatively effecting Atomos are now coming to a close, we are able to focus our time and resources on releasing new and groundbreaking products to existing and new markets as well as ensuring the company continues on its path to financial strength.”
Young’s appointment to the company earlier this year was accompanied by two senior exits from the board including the resignation of Trevor Elborne as CEO and director. Chief financial officer James Cody also resigned in January to pursue other business interests.
Atomos, a global company that develops and produces monitors, recording devices and video and audio capture software, posted a bottom-line loss of $15 million in FY24, a 38 per cent improvement from the previous year.
While group revenue slipped 16 per cent to $35.7 million, revenue in the second half rose 5.1 per cent to $18.3 million.
In announcing its profit results last month, Atomos said the return of Young as CEO has set the company on track to “rebuilding and restoring shareholder value”.
Enjoyed this article?
Don't miss out on the knowledge and insights to be gained from our daily news and features.
Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.
Support independent journalism and stay informed with stories that matter to you.
)
)
)
)
)
