• Fermi claims Neugebauer damaged relationships with certain business counterparts, among other things.
• The current board fears that if Neugebauer succeeds at calling for a special meeting, he would force a sale of the company, benefiting him and his affiliates while harming public shareholders.
• The company recently proposed to amend its bylaws to protect itself against the former CEO.

Energy grid developer Fermi Inc. (FRMI) on Monday filed a consent revocation statement with the SEC to prevent ousted CEO Toby Neugebauer from gaining approvals for a special shareholder meeting as he pushes to regain control of the company.

Fermi said a special shareholder meeting hosted by Neugebauer is not in the best interests of the company or its shareholders, citing the stock’s value as having deteriorated during his tenure.

The company stated Neugebauer was fired for his misrepresentations to the board, for public communications that were inconsistent with his fiduciary duties, and a pattern of conduct in violation of corporate policies. 

“His behavior as CEO created disruption to operations and presented a significant threat to meaningful relationships with key stakeholders at a pivotal time in the company's growth trajectory,” Fermi said in a public statement.

Fermi claims Neugebauer damaged relationships with certain business counterparts to the extent that one of them even threatened to terminate their agreement with the company due to his conduct. Several counterparties, including potential institutional investors and private infrastructure funds, have conditioned their willingness to continue doing business with Fermi if Neugebauer is not involved.

Neugebauer Calls For Special Stockholder Meeting

The current board fears that if Neugebauer succeeds in calling for a special meeting, he would force a sale of the company, benefiting him and his affiliates while harming public shareholders.

Late Thursday, Fermi’s new management proposed changes to the company’s bylaws to modify board size, requiring a 70% vote of outstanding shareholders, after learning that the former CEO and his affiliates currently control about 40% of Fermi's outstanding shares. 

The move to change the bylaws followed a Texas judge's ruling striking down the company’s application for a temporary restraining order and a preliminary injunction seeking to prevent Neugebauer from calling a special meeting on May 29.

In response, Neugebauer had said, “Every shareholder should contest this attempt to change the rules two weeks before a shareholder meeting. It is an unprecedented act of entrenchment – they're simply running scared because they don't want shareholders to have a real voice.” 

"If Fermi's desperate defensive bylaw amendments stand, it raises questions about the extent to which Texas corporate governance law will actually protect shareholder interests,” Neugebauer added.

What Retail Thinks About FRMI

On Stocktwits, retail sentiment about FRMI remained ‘bullish' amid ‘extremely high’ messaging volumes over the last 24 hours.

FRMI stock has fallen more than 21% so far this year and more than 81% since going public last year.

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