Logistics technology provider Slync.io announced Friday the firing of CEO Chris Kirchner and removed him as chairman of its board of directors.
In a statement to FreightWaves, the board said it has appointed Timothy F. Kehoe, Slync’s former chief of staff and retired U.S. Army colonel, to serve as interim president.
“In conjunction with the recent leadership change, we at Slync are restructuring the organization to drive more value for our current and future customers,” said Kehoe in an email. “We remain focused on moving the business forward and transforming the logistics industry with purpose-built solutions to improve operational efficiency, create sustainable growth and accelerate return on investment for some of the best organizations in the world.”
The company and Kirchner had come under fire in recent months after he failed to pay employees for months, used his private jet to fly to celebrity golf tournaments and attempted to buy an English soccer team.
After finding out about his suspension July 25, Kirchner retaliated by locking out some executives from the company’s communication channels, a source familiar with the situation said.
Kirchner, who had previously ordered the suspensions of nearly a dozen current and former employees for speaking out about the Dallas-based logistics tech startup’s failure to make payroll, was placed on leave on July 25 before being terminated.
On July 25, Burton White, vice president of global sales at Slync — which received a $60 million Series B funding round led by venture firm Goldman Sachs Growth — confirmed that Kirchner “has been suspended from his CEO responsibilities.”
White declined to answer whether Kirchner, who is also the chairman of the board of directors, was suspended with or without pay.
“The company is unable to discuss the separation principles or the contract around the separation,” White told FreightWaves. “We have a good team and we have a good product.”
One former employee said nearly a dozen others “were either suspended for being vocal internally or allegedly externally about the missing payments” remain in a state of uncertainty and have been locked out of their work accounts for over a month.
“Those suspensions were meant to last two weeks [starting on June 25], yet they still do not have access to their work accounts,” a source told FreightWaves. “They have been in limbo for a month now and still no paychecks.”
Source alleges Kirchner retaliated after suspension
After Kirchner received the news of his suspension, he retaliated, locking out several executives from accessing Google Workspace, previously Google Suite, and other communication channels the company utilizes, said the source, who didn’t want to be named for fear of retaliation.
“Over the weekend, as a form of payback, Chris, who is a G-suite administrator, went through and tried to revoke some of Slync users’ privileges to block them from being able to access the network,” the source said. “On Monday, it took a Slync executive hours on the phone with Google to regain access to their own site because of Chris.”
Kirchner did not respond to FreightWaves’ request seeking comment.
Investors, led by Goldman Sachs, which has a seat on Slync’s board of directors, agreed to inject more funding to pay employees. The source confirmed that US and Canadian employees have been paid after being owed around $3.8 million but
FreightWaves and other news outlets have been reporting on the FreightTech startup’s inability to pay its employees for months. Kirchner appeared unconcerned about the company’s financial health, participating in a celebrity golf tournament in Limerick, Ireland, the JP McManus Pro-Am, over the July Fourth weekend and making a failed attempt to buy an English soccer team a month earlier.
“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, I saw photos of Chris playing golf with celebrities in Ireland,” said a former employee, who spoke to FreightWaves on the condition of anonymity. “That’s when I realized he didn’t care about us and our hard work that brought in new investor money. Everything was about him and how fast he could spend it.”
Slync.io and Kirchner face wrongful termination lawsuit
Over the past two years, Slync, valued at $240 million, has raised over $70 million, including the $60 million Series B funding round that closed in February 2021 and was led by venture firm Goldman Sachs Growth, ACME Ventures, 235 Capital Partners, Correlation Ventures and other existing investors.
Slync.io, a logistics visibility platform that works with shippers, 3PLs and carriers, was co-founded in 2017 by Kirchner along with Rajan Patel, the startup’s chief product officer, and Varun Dodla, its co-chief technology officer.
Slync’s former chief financial officer, chief revenue officer and a former VP say they never had full access to the company’s accounts and brought their concerns to the board, stating that Kirchner was the only one with access to its investment account, which included the $60 million Series B funds.
The three employees were fired by Kirchner and say they didn’t receive a response from board members.
Soon after the company received the $60 million fund raise in 2021, court filings in a wrongful termination lawsuit by a former company vice president claim Kirchner bought a 2010 Gulfstream G550 jet for $15 million. It’s currently for sale, although the price tag is significantly higher now at $23.5 million.
After months of rationales as to why Kirchner and Slync were unable to make payroll — initially blaming an internal administrative error, then later stating its payroll woes stemmed from its inability to liquidate funds in a timely manner — some current and former employees say they are skeptical about receiving paychecks this week.
“I’ll believe it when I see it,” said another former employee who spoke to FreightWaves on the condition of anonymity. “It’s been two months of empty promises now. [The board] knew about this situation for months and did nothing. Why trust them now?”
Mary Athridge, a spokesperson with Goldman Sachs Asset Management, declined to comment on the amount owed to employees and directed further questions to Slync VP White.
After Slync was late or missed seven pay periods from April 22 to June 3, Jason Selvidge, former vice president of engineering, says he was fired by Kirchner.
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,” according to court documents filed by Selvidge’s attorneys last week in San Francisco County Superior Court.
Attorneys Laurel Holmes and Chantal Payton of Payton Employment Law in Acton, California, are representing Selvidge in his wrongful termination lawsuit.
Besides Slync, Kirchner is also named in the civil suit. That’s because Selvidge’s attorneys plan to argue there’s a strong basis for individual liability against the former CEO.
Holmes told FreightWaves her firm plans to argue tSlync was undercapitalized, meaning it didn’t have enough money to operate and pay its debts and liabilities, including payroll.
“The purpose of piercing the corporate veil is to be able to hold shareholders and owners personally liable,” Holmes said. “Normally, corporations shield the shareholders from personal liability, but if you can pierce the corporate veil, then you can recover money from individual shareholders.”
The lawsuit claims Kirchner made personal use of corporate assets and “intermingled assets, liabilities and obligations between himself and the corporation.”
In his lawsuit, Selvidge states he wasn’t the first executive Kirchner fired for going to Slync’s board about the company’s financial health. According to court filings, Slync’s former CFO, Samar Kamdar, was fired by Kirchner in late May after alerting the board about the payroll issues and requesting financial statements from the board.
“His [Kamdar] review of the financial statements indicates that some figures do not add up, as he did not recognize some of the accounts which reported revenue,” according to the suit.
Prior to Kamdar’s firing, Selvidge said the former CFO told him the company only had $15,000 in its operating account and that Kirchner was the only one with access to Slync’s investment account.
The lawsuit claims Kamdar was fired after he complained to investors that Kirchner was “misrepresenting the amount of annual revenue the company was making to investors by a factor of at least thirty.”
A source privy to the company’s financial woes said Kirchner inflated the company’s financials to the board, claiming the company had raked in nearly $30 million in 2021 when actual revenue was around $1 million.
A former employee told FreightWaves the $60 million-plus from the Series B raise the company received 17 months ago “has been completely spent,” despite Kirchner’s assurances to employees via email in May that Slync had “plenty of runway to survive and thrive.”
Conversations are ongoing about Slync’s future, according to multiple employees.
“I don’t think Slync executives anticipate it as being a viable company going forward because the name has been tarnished as a result of Chris Kirchner’s actions,” a source told FreightWaves. “Instead, we are hearing it’s going to be sold to the highest bidder so Goldman Sachs can recoup some of what they’ve put into the company.”
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