Slync.io, a logistics technology startup, fired CEO Chris Kirchner and removed him as chairman of its board of directors on Friday.
The board announced to FreightWaves that Timothy F. Kehoe, Slync’s former chief of staff and retired U.S. Army colonel, had been named interim president.
In an email, Kehoe stated, “In connection with the recent leadership change, we at Slync are restructuring the organization to deliver additional value for our present and prospective clients.” “We remain committed to driving the business ahead and redefining the logistics sector with purpose-built solutions that increase operational efficiency, drive sustainable growth, and accelerate return on investment for some of the world’s top businesses.”
Kirchner and the company have recently been under scrutiny after he neglected to pay staff for months, used his private jet to fly to celebrity golf tournaments, and attempted to buy an English soccer team.
Kirchner retaliated after learning of his suspension on July 25 by blocking several executives from the company’s communication lines, according to a source familiar with the incident.
Kirchner, who had previously suspended nearly a dozen current and former employees for speaking out about the Dallas-based logistics tech startup’s failure to pay its employees, was placed on leave on July 25 before being fired.
Kirchner “has been suspended from his CEO responsibilities,” revealed Burton White, vice president of global sales at Slync, which obtained a $60 million Series B fundraising round headed by venture company Goldman Sachs Growth, on July 25.
White would say if Kirchner, who also serves as chairman of the board of directors, was suspended with or without pay.
“The corporation is unable to reveal the separation principles or the contract pertaining to the split,” White explained to FreightWaves. “We have a great team and a great product.”
According to one former employee, about a dozen others who “were either suspended for being loud inside or purportedly externally about the missing payments” are still in limbo and have been locked out of their work accounts for more than a month.
“Those suspensions were supposed to be for two weeks [beginning June 25], but they still don’t have access to their work accounts,” a source told FreightWaves. “They’ve been in limbo for a month and still haven’t received their salaries.”
Kirchner allegedly responded following his suspension, according to a source.
Kirchner retaliated after learning of his suspension, blocking many executives from accessing Google Workspace, formerly Google Suite, and other communication channels used by the company, according to the source, who did not want to be identified for fear of retaliation.
“As a kind of retaliation, Chris, who is a G-suite administrator, went through and tried to revoke some of Slync users’ privileges to prevent them from accessing the network over the weekend,” the source claimed. “It took a Slync executive hours on the phone with Google on Monday to restore access to their own site due to Chris.”
Kirchner did not respond to a request for comment from FreightWaves.
Investors, led by Goldman Sachs, which sits on Slync’s board of directors, agreed to increase money for employee compensation. According to the source, the US and Canadian employees were reimbursed after being owed approximately $3.8 million.
For months, FreightWaves and other news publications have reported on the FreightTech startup’s failure to pay its staff. Kirchner looked unconcerned about the company’s financial condition, taking part in the JP McManus Pro-Am celebrity golf tournament in Limerick, Ireland, over the Fourth of July weekend and making a fruitless attempt to buy an English soccer team a month before.
“I saw images of Chris playing golf with celebrities in Ireland as I was trying to figure out how I was going to pay my mortgage and child care for the second month in a row,” said a former employee who spoke on the condition of anonymity to FreightWaves. “That’s when I understood he didn’t care about us or the money we brought in from new investors.” Everything revolved around him and how quickly he could spend it.”
Kirchner and Slync.io are being sued for wrongful firing.
Slync, which is valued at $240 million, has raised over $70 million in the last two years, including a $60 million Series B fundraising round headed by venture firm Goldman Sachs Growth, ACME Ventures, 235 Capital Partners, Correlation Ventures, and other current investors.
Kirchner co-founded Slync.io, a logistics visibility platform that works with shippers, 3PLs, and carriers, in 2017 with Rajan Patel, the startup’s chief product officer, and Varun Dodla, its co-chief technical officer.
Slync’s former CFO, CRO, and VP claim they never had full access to the company’s finances and raised their concerns with the board, claiming Kirchner was the only one having access to its investment account, which included the $60 million Series B funding.
Kirchner fired the three employees, who claim they received no response from board members.
Kirchner purchased a 2010 Gulfstream G550 jet for $15 million shortly after the company obtained the $60 million fundraise in 2021, according to court records in a wrongful termination case filed by a former company vice president. It is currently for sale, albeit the asking price has risen dramatically to $23.5 million.
After months of explanations for why Kirchner and Slync were unable to make payroll — first citing an internal administrative error, then subsequently blaming an inability to sell cash in a timely way — some current and former employees are suspicious about receiving salaries this week.
“I’ll believe it when I see it,” said another former employee who spoke on the condition of anonymity to FreightWaves. “It has now been two months of hollow promises. [The board] was aware of the situation for months yet did nothing. “Why should I trust them now?”
Goldman Sachs Asset Management spokesperson Mary Athridge declined to comment on the amount owing to workers and referred further questions to Slync VP White.
Kirchner sacked Jason Selvidge, former vice president of engineering after Slync was late or skipped seven pay periods from April 22 to June 3.
According to court documents filed by Selvidge’s attorneys last week in San Francisco County Superior Court, Selvidge claims he was locked out of his work accounts and later fired after writing a letter to the company’s board of directors, voicing his concerns about Slync’s ongoing payroll issues and how Kirchner was using company funds for “personal enrichment.”
Selvidge is being represented in his wrongful termination action by Laurel Holmes and Chantal Payton of Payton Employment Law in Acton, California.
Kirchner is also mentioned in the civil suit, in addition to Slync. This is because Selvidge’s attorneys intend to demonstrate that the former CEO has a strong foundation for individual culpability.
Holmes told FreightWaves that her firm intends to argue that tSlync was undercapitalized, which means it lacked the funds to operate and pay its debts and responsibilities, including payroll.
“The goal of penetrating the corporate veil is to make shareholders and owners personally liable,” Holmes explained. “Normally, businesses shield shareholders from personal culpability, but piercing the corporate veil allows you to recover money from individual owners.”
Kirchner is accused of misusing business assets and “intermingling assets, liabilities, and obligations between himself and the corporation,” according to the lawsuit.
Selvidge claims in his lawsuit that he was not the first executive sacked by Kirchner for speaking to Slync’s board about the company’s financial situation. According to court documents, Kirchner sacked Slync’s former CFO, Samar Kamdar, in late May after he alerted the board about the payroll irregularities and requested financial disclosures from the board.
According to the claim, “his [Kamdar] analysis of the financial statements reveals that some statistics do not match up, since he did not recognize some of the accounts that generated revenue.”
Selvidge claimed that prior to Kamdar’s firing, the former CFO told him that the company only had $15,000 in its operational account and that Kirchner was the only one with access to Slync’s investment account.
According to the lawsuit, Kamdar was sacked after complaining to investors that Kirchner was “misrepresenting the amount of annual revenue the company was earning to investors by at least thirty factors.”
According to a person familiar with the company’s financial issues, Kirchner overstated the company’s financials to the board, claiming approximately $30 million in revenue in 2021 when actual revenue was about $1 million.
According to a former employee, the $60 million-plus from the company’s Series B financing 17 months ago “has been totally gone,” despite Kirchner’s promises to staff via email in May that Slync had “plenty of runways to survive and develop.”
According to many staff, discussions concerning Slync’s future are continuing.
“I don’t think Slync executives see it as a viable firm going forward because Chris Kirchner’s actions have soiled the name,” a source told FreightWaves. “Instead, we’re hearing it’ll be sold to the highest bidder so Goldman Sachs can return some of their investment.”
