Houston energy executive resigns as chairman of Thinkstream’s board, saying he had been ‘misled’
Thinkstream’s chairman, Freeport LNG Development LP CEO Michael Smith, resigned from the company’s board of directors more than three months ago, saying he was “shocked” to discover he had been “misled and had information hidden from me.”
The contents of the March 20 letter of resignation, obtained this week by Daily Report, shed new light on the financial issues faced by the Baton Rouge-based firm that provides software to hundreds of law enforcement agencies in Louisiana and five other states. Creditors have forced Thinkstream into bankruptcy, alleging the company carries more than $10 million in unpaid debt and is unable to make payroll and owes back payroll taxes. They have filed an emergency motion asking U.S. Bankruptcy Judge Douglas Dodd to appoint an interim Chapter 11 trustee to manage the company’s affairs. A hearing is scheduled for Monday.
As Daily Report also reported last week, the U.S. Department of Labor last year forced Thinkstream to repay more than $126,000 to its 401(k) plan for employees after discovering that Thinkstream withheld contributions from participating employees’ wages but did not deposit the money into the retirement plan “timely and completely,” causing the plan to sustain losses.
In his resignation letter, Smith writes that Thinkstream CEO Barry Bellue neglected to inform him that Thinkstream had been initially forced into involuntary bankruptcy in September 2014 and agreed to a consent plea without telling or securing approval from the board of directors.
“Even worse,” Smith wrote to Bellue, “is that I didn’t find out from you.” Smith notes that Bellue “even had the nerve to continue to ask me for financial assistance so you could make payroll last fall and this winter while the company was under a consent decree. … Further, I now find out from you that you have continued to sell stock in the company without disclosure to or approval by the board.”
Smith concludes his resignation letter by asking Bellue to “advise all appropriate parties as I do not want any misunderstandings or have anyone believe that I am still associated with the leadership of the company.”
Smith—who did not return a call earlier this week requesting comment—isn’t the only top executive to leave the embattled firm. CFO Morris Alexander is no longer with Thinkstream, and Paul San Soucie, vice president for customer relations, is said to be “on sabbatical for personal reasons” and “available as needed during this time,” according to Thinkstream spokeswoman Kim Bergeron.
Also this week, Thinkstream’s bankruptcy attorney, Edward Gonzales III, has asked to withdraw as counsel. In a motion before the judge, he writes that he and Thinkstream are “in fundamental disagreement over matters that are related to this case,” which “has among other things complicated efforts to respond to discovery requests.”
At deadline, Thinkstream executives had not responded to a request for comment.