The Minnesota Timberwolves' billionaire owner Glen Taylor is being sued by a group including former NBA star and Wolves coach Kevin McHale.
The lawsuit filed in Ramsey County District Court on Thursday names Taylor and several other board members of Envoy Medical Corp., a company based in White Bear Lake which makes ear implant devices.
Taylor, who bought a 15 percent stake in the company in 2009 and serves on the board, is being accused of unjust treatment and fraud, with other defendants including former Envoy board members Franz Altpeter, Chuck Brynelsen and David Fabry.
Doing the suing is former Envoy Medical CEO Patrick Spearman and former Envoy president Shelly Amann, who have been joined by Kevin McHale and his wife, Lynn.
They allege that Taylor "controlled the Envoy directors and caused them to make decisions that benefitted Taylor personally at the expense of other shareholders."
They argue that he did this "out of spite because of his daughter’s employment being terminated and because he believed he could make a substantial profit at the expense of the shareholders."
Spearman claims that it was because his team fired Taylor's daughter "for cause," namely poor performance and eventually not showing up for work, that Taylor allegedly worked to oust Spearman as CEO and Amann as president, which saw them lose their jobs in 2012.
They then claim Taylor "used his money, control, and influence to wrestle control of the company away from its shareholders by diluting their voting rights through a series of loans and preferred share purchases."
The involvement of McHale, the Minnesota native who had a 13-year career in the NBA with the Boston Celtics before later working as a coach for the Timberwolves in the 2000s, came about because he encouraged other investors to put money into Envoy Medical.
Per a press release, McHale – who himself owned a small stake in Envoy – "feels the need to be part of this lawsuit because of the numerous small shareholders that are being harmed."
Spearman claims the company was on the verge of major success thanks to its "Esteem" hearing implant technology, with early adopters including "The Incredible Hulk" Lou Ferrigno, who was full of praise for the implants and the improvement it made to his hearing.
The lawsuit says that thanks to endorsements such as this, the company managed to sell 600 of the implants, which cost $30,000, to people out-of-pocket over two years.
However, they allege that Taylor began to "meddle" in the company, and later took advantage of its "financial distress."
The suit claims that if Envoy defaults on its $9 million loans to Taylor's financing company, Taylor could take the company's assets for himself, including the Esteem technology.
"Glen Taylor should be held accountable for his behavior. He and the other Envoy directors are responsible for what I believe could be hundreds of millions to billions of dollars in damages to Envoy’s shareholders," Spearman said.
"It appears Taylor took advantage of his position of power and put his own personal benefit first to the detriment of Envoy shareholders and victims of hearing loss."
Bring Me The News has reached out to Glen Taylor for comment, and will update this story if we hear back.