The boardroom and C-suite at Biolase (NSDQ:BIOL) got a shake-up this week following a Delaware Supreme Court decision in a lawsuit filed by Oracle Partners earlier this year.
Biolase said today that Pignatelli resigned after the high court’s ruling, but still retains a seat on the board. Biolase also said it appointed Jeffrey Nugent to the board and named him interim CEO while it searches for a replacement.
Dismal 1st-quarter earnings revived the proxy war between Oracle and Biolase in May, after the investment firm accused Pignatelli of manipulating the board. Delaware’s Chancery Court later ruled that the Biolase board consisted of 4 uncontested members and Paul Clark, a Pignatelli nominee who then aligned himself with other directors seeking Pignatelli’s ouster, according to court documents. Today Biolase made Clark chairman of the board.
The lower court found that Clark was made a board member after the oral resignation of Alexander Arrow, according to the court documents.
Pignatelli "planned Arrow’s resignation and Clark’s appointment to the board, and a press release issued by Biolase after the board meeting quoted Pignatelli as saying he was ‘thrilled’ with Clark’s appointment to the board. But Pignatelli quickly reversed course when he learned that Clark had aligned himself with a faction of the board that wanted to remove Pignatelli from his position as CEO. Pignatelli argued that because Arrow’s resignation at the board meeting was given orally and was not reduced to writing before Clark was appointed to fill the vacancy created by Arrow’s resignation, Clark had not been properly appointed to the board," according to the documents.
Delaware’s highest court disagreed June 12, upholding the Chancery Court’s decision.
"The circumstances here present one of the clearest cases of a director resignation by means other than a formal writing. The Court of Chancery had abundant evidence to support its factual finding that Arrow resigned," according to the ruling.
