BETHESDA, Md.-Comsat Corp. filed a lawsuit against its former chief executive officer, Bruce Crockett, alleging a conspiracy linking him with Herbert Denton, Providence Capital Inc. and Wyser-Pratte Inc., who have threatened Comsat with a proxy contest.
The lawsuit alleges that Crockett resigned in order to avoid being fired by the company’s board of directors for reasons including Crockett’s failed diversification strategy, which has fueled criticism of Comsat by its shareholders, the company said. Comsat said Crockett also violated company policies by making stock more attractive to speculative investors and abandoning his managerial duties at the company.
Comsat said an agreement was reached between Crockett and the board, providing Crockett with payments and benefits in exchange for Crockett’s agreement not to leak confidential information, join with competitors or disparage the company and its leadership employees.
The company said Crockett violated the agreement by working with Denton, Wyser-Pratte Inc. and several Providence defendants in an attempt to create turmoil among Comsat shareholders by threatening a proxy contest for control of the company.
Providence Capital and Providence Investors L.L.C., which Denton and Wyser-Pratte are using in their proxy effort, also are named as defendants, as are several `John Does’ who apparently are aligned with the companies.
The lawsuit charges the defendants with violating the Communications Satellite Act of 1962, a federal statute governing Comsat, as well as the 1996 termination agreement in which Crockett agreed not to disparage, compete with or disclose confidential information about Comsat to third parties.
Comsat’s complaint seeks more than $20 million in damages.
