After being one of three Ambassadors Group executives sued in 2009 over allegedly providing inaccurate financial information, former Chief Financial Officer Chadwick Byrd could have taken the simple and safe route.
He could have signed a $7.5 million settlement with the investor group that filed the class action suit, as his two former colleagues did. That choice would have left Byrd with no admission of wrongdoing and no damages to pay, since the settlement was covered by insurance.
However Byrd, 39, refused to be part of the settlement between Ambassadors, a Spokane-based, publicly traded company that promotes student and professional travel, and Plumbers Union Local 12 Pension Fund, the stockholder group that sued him in U.S. District Court.
He said he’s done nothing wrong.
Ambassadors Group CEO Jeff Thomas and Executive Vice President Margaret Thomas were sued along with Byrd, and both have signed the settlement, which followed a court-requested arbitration.
The suit alleged the executives in 2007 gave inaccurate reports on the company’s declining business. As a result, investors were left holding stock that fell in value dramatically as the company’s financial picture worsened, the suit said.
In settling the case, Margaret and Jeff Thomas – who are married – admitted no wrongdoing.
Byrd was CFO at Ambassadors between 2005 and late 2009, when he left the company.
Byrd is still a defendant but has no plans to sign the final settlement, which was approved by Judge Justin Quackenbush recently.
The court gave the parties until Nov. 30 to file final comments. When the judge signs the settlement, Byrd will be dismissed from the suit, said Byrd’s Seattle attorney, Stellman Keehnel.
“This is something you don’t see all that often,” said John Grant, the San Francisco lead attorney representing the plumbers union in the lawsuit.
“Usually a person in this kind of case will stipulate to the settlement, and the settlement will include language that says ‘No wrongdoing is acknowledged,’ ” Grant said.
But Byrd all along has said he cannot do that.
“It’s important that CFOs do things the right way. … I’ve been clear from the start I never did anything wrong,” Byrd said.
He said his professional career has suffered from being named a defendant. He looked for work through a Seattle company that recruits financial executives; they told him they’d be glad to help him, but only after the Ambassadors settlement is concluded, he said.
Keehnel, Byrd’s attorney, said Byrd gains a clear benefit by refusing to sign the settlement.
In job applications when facing the question, “Have you ever been sued?” Byrd will have to say yes.
“But when the next question follows, ‘How was that suit resolved?’ he can say, ‘I was dismissed,’ whereas others (in this suit) will have to answer ‘The suit was settled,’ ” Keehnel said.
After leaving Spokane, Byrd moved to the Phoenix area where he started two companies that arrange sports tours for tennis players and golfers. Both draw on his work with Ambassadors; his customers pay to go to major events, such as the Australian Open, and while on tour, they also play tennis, or golf and receive professional coaching.
Of the $7.5 million to be paid to the investors, roughly 25 percent will go for attorneys’ costs and fees, Grant said. How much each shareholder receives depends on the number of shares owned and when they were sold.