Ex-GC Turned Winery Owner Wins Derivative Suit
The former general counsel of Covad Communications says he feels partly vindicated by a $5 million settlement of his derivative suit against the telecommunications company, even though he won’t receive an individual payout.
But as one of the largest individual stockholders, Dhruv Khanna, one of the company’s founders, receives an indirect benefit, the Recorder reports. It pales in comparison, though, to the boost that accrued to his net worth when Platinum Equity agreed to buy the company for $304 million in October, amounting to about $1 a share.
“There was a settlement paid by the directors and former directors of the company,” Khanna told the Recorder. “I do feel at least partly vindicated, and that’s good enough for me.”
Khanna, who now owns a California winery, filed suit after he was fired in 2003 amid charges of sexual harassment. His suit accused the directors of wasting money and enriching themselves. Among the allegations were that the board approved the buyout of a failing company backed by one of the directors and allowed Covad officials to form a competing venture.
The settlement pays $5 million and an additional $1.89 million in attorney fees.
Khanna no longer practices law. Instead, he focuses on “recreation, philanthropy and business,” he told the Recorder. “I’ve certainly moved on with my life,” he said.