Bolt founder Ryan Breslow has proposed a settlement with investor Activant Capital this week, which could put an end to a lawsuit brought by Activant. The investor accused Breslow of adding $30 million to Bolt’s balance sheet in the form of personal debt and removing board members when they urged Breslow to repay it.
Activant sued Breslow in July 2023, in a Delaware court, on behalf of Steve Sarracino, a former Bolt board member, alleging that Breslow removed him and two other board members when they declined to help Breslow repay the $30 million loan. Sarracino’s suit also alleged that CEO Maju Kuruvilla and three board members appointed afterward did not force Breslow to make loan repayments.
Breslow’s $30 million loan was secured by Bolt, however, Breslow defaulted on the loan, the suit alleged. Instead of canceling shares he owned to repay the sum, Breslow allowed those millions of dollars to be removed from Bolt’s accounts, according to the lawsuit.
At the time, Bolt’s board was composed of Breslow, Maju Kuruvilla (who replaced Breslow as the CEO in January 2022), Brian Reinken of WestCap Management, Arjun Sethi of Tribe Capital Management and Steve Sarracino of Activant.
In March 2023, Breslow removed all of them from the board and appointed people thought to be more sympathetic to his cause, including musician Larrance Dopson, journalist Esther Wojcicki and crypto investor Brock Pierce. All three of them have since left the board and were replaced by other Breslow acquaintances.
Kuruvilla himself was later removed as CEO in March 2024 and replaced with Bolt head of sales Justin Grooms.
At the same time as the Activant lawsuit, the U.S. Securities and Exchange Commission was looking at Bolt and Breslow related to whether federal securities laws were violated in connection with statements made when Bolt was raising money in 2021.
This stemmed from a letter sent by Reinken and Sethi, who were Series C and B investors, respectively, to Bolt’s general counsel as part of a demand to inspect the company’s records.
The letter alleged that Breslow “misled” investors while fundraising for the company’s $355 million Series E round, valuing the company at $11 billion. The probe against Bolt was later dropped.
Neither Breslow nor an Activant representative responded for comment at the time of publication.
Now according to the settlement plan seen by TechCrunch, Bolt will cancel 13,397,270 common shares previously owned by Breslow, representing $37,378,383. Breslow is essentially giving those shares back to Bolt to resolve the principal loan, expenses and interest.
On the Activant side, the firm said it chose not to participate in a tender offer, and instead, Bolt will buy back 18,247,337 of the Activant shares worth $36,494,674.
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