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(Bloomberg) -- Cybereason Inc.’s chief has stepped down following a months-long feud with investors SoftBank Group Corp. and former US Treasury Secretary Steven Mnuchin that’s stalled decision-making at the cash-strapped startup.
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Eric Gan resigned after a boardroom battle erupted at the La Jolla, California-based cybersecurity company, which has been struggling to raise money and stem losses. A planned merger with Chicago-based peer Trustwave Holdings Inc. has also been terminated, according to a person familiar with the matter.
Gan, a former SoftBank executive who helped the tech investor build telecom infrastructure in Japan, sued Mnuchin and the Vision Fund last month, alleging the investors had prioritized their own interests and stymied his efforts to raise the money needed to stave off bankruptcy. Both Mnuchin and the Vision Fund deny the allegations.
“I cannot continue to lead a company where critical decisions are made based on personal interests rather than what is best for the organization,” Gan said in an internal email to staff. “I cannot stand by while minority shareholders, employees and customers suffer the consequences.”
Manish Narula, Cybereason’s chief financial officer, has been appointed to succeed Gan as CEO, according to another person familiar with the matter. An announcement will be made this week, the person said.
At the heart of the dispute is a disagreement over how to structure fundraising in such a way that it doesn’t disadvantage or undervalue the startup. The lawsuit alleged that Liberty and Vision Fund proposed a financing that would have deliberately excluded management and further concentrate power in the hands of the two entities.
Representatives at the Vision Fund, SoftBank Corp. and Trustwave declined to comment. Representatives at Liberty didn’t respond to a request for comment.
Investors have devoted more than $800 million to Cybereason. The startup sells technology that it says uses artificial intelligence to predict and defeat cyber-attacks. The company was potentially worth billions of dollars at one point but its valuation later tumbled to less than $400 million.
In the latest round of talks, the Vision Fund, SoftBank’s telecom arm and Mnuchin’s Liberty Strategic Capital are working to close a deal as soon as this week, according to people familiar with the matter, asking not to be named as the discussions remain private.