{"id":14655,"date":"2023-03-26T14:45:38","date_gmt":"2023-03-26T21:45:38","guid":{"rendered":"https:\/\/essential.construction\/news\/defunct-katerra-sues-former-cfo-for-bonus\/"},"modified":"2023-03-26T14:45:39","modified_gmt":"2023-03-26T21:45:39","slug":"defunct-katerra-sues-former-cfo-for-bonus","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/defunct-katerra-sues-former-cfo-for-bonus\/","title":{"rendered":"Defunct Katerra sues former CFO for bonus"},"content":{"rendered":"<p> <a href=\"https:\/\/essential.construction\/files\/membership-default-internal\/\" class=\"memberhide\"><img decoding=\"async\" src=\"https:\/\/essential.construction\/news\/wp-content\/uploads\/sites\/15\/2023\/01\/20220718_175041000_iOS.jpg\" alt=\"-\"><\/a><br\/><br \/>\n<\/p>\n<div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li>Bankrupt construction startup Katerra Inc. is taking legal action against its former CFO, Matthew Marsh, \u201cto recover avoidable transfers and damages for breach of contract,\u201d according <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/defunct-katerra-sues-former-cfo-bonus\/645538\/file:\/\/\/C:\/Users\/GraceNoto\/Downloads\/1e91ceb0-5523-407c-bfa3-5f53fcac1df5.pdf\" target=\"_blank\">to a Mar. 6 complaint<\/a> filed in the United States Bankruptcy Court in the Southern District of Texas on behalf of the failed construction startup.<\/li>\n<li>Once valued at $4 billion, the company \u2014 which filed for Chapter 11 bankruptcy in June 2021 \u2014 is alleging that Marsh is required to pay back his $1 million signing bonus and has not done so. The company is also arguing that his relocation bonus, paid out for Marsh and his family to make the move to its California headquarters, was a \u201cconstructive fraudulent transfer\u201d because of the company\u2019s financial condition at the time.<\/li>\n<li>\u201cDebtor Katerra Inc. was insolvent at the time of, or was rendered insolvent as a result of, its payment of the Relocation Bonus to Defendant Marsh,\u201d the company said it its filing, adding that payment of the bonus \u201cis avoidable by Plaintiffs under the Texas Fraudulent Transfer Act.\u201d<\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p>A GE veteran, Marsh served as Katerra\u2019s CFO for just under a year, <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/defunct-katerra-sues-former-cfo-bonus\/645538\/file:\/\/\/C:\/Users\/GraceNoto\/Downloads\/1e91ceb0-5523-407c-bfa3-5f53fcac1df5.pdf\" target=\"_blank\">according to court filings<\/a>. According to his employment agreement, Marsh received a $1 million signing bonus, a $250,000 relocation bonus including reimbursement for his moving expenses, \u201cmortgage assistance\u201d which consisted of a $2.75 million loan, as well as an annual starting salary of $700,000.<\/p>\n<p>A startup which branded itself as a one-stop shop for construction needs \u2014 working as everything from the architect to the design and management of its building projects \u2014 the company quickly achieved unicorn status after its founding in 2015, with Softbank\u2019s Vision Fund leading a $865 million funding round for the company in 2018.<\/p>\n<p>Katerra, which reached a peak valuation of $4 billion in 2019, filed for Chapter 11 bankruptcy in June 2021, with its financial grievances due to the impact of the COVID-19 pandemic, construction costs and failing to lure away developers and contractors from their traditional subcontractors, according to <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/what-does-katerras-demise-mean-for-the-contech-and-modular-industries\/608037\/\" target=\"_blank\">a 2021 writeup from Construction Dive<\/a>. The company sold off its assets soon after filing for bankruptcy, including a manufacturing facility \u2014 among other assets \u2014 in Tracy, California for $21.25 million and its factory in Spokane, Washington for $50 million.<\/p>\n<p>The complaint, citing Marsh\u2019s employment agreement, notes Marsh was required to pay back his $1 million signing bonus if he either voluntarily terminated his employment within the first 12 months of his start date, or if his employment was terminated for cause by Katerra within that same 12 month window.<\/p>\n<p>Marsh began his employment with Katerra on Sept. 23, 2019 and was terminated \u201ceffective immediately\u201d on Sept. 20, 2020 \u2014 three days shy of the 12-month period cited in the employment agreement \u2014 by Katerra\u2019s commission committee for cause, with the committee requiring repayment of his signing bonus in full, according to the Mar. 6 court filing.<\/p>\n<p>\u201cDespite the terms of the Employment Agreement, his termination for Cause, and the Demand Letter, Marsh has failed and refused to repay the Signing Bonus to <span>Katerra<\/span> Inc. or any of the Debtors,\u201d the Mar. 6 complaint alleges.<\/p>\n<p>Marsh now serves as CFO for venture capital company Celesta Capital, having taken on the seat in May 2020, according to his LinkedIn profile. \u00a0<\/p>\n<p>Other companies have also recently shelled out lucrative cash bonuses to engage top talent. PayPal, for example, granted its previous CFO, Blake Jorgensen, a $6 million signing bonus upon his appointment in August. Jorgensen <a rel=\"nofollow noopener\" href=\"https:\/\/www.cfodive.com\/news\/paypal-cfo-hits-exit\/644429\/\" target=\"_blank\">departed from his position<\/a> as part of an \u201cinvoluntary termination by the company for a reason other than cause or disability\u201d in early March, having been on medical leave since September, just a few weeks into his time at the CFO chair.<\/p>\n<p>Executive compensation has also recently come under the spotlight at the Department of Justice: firms which tie executive compensation to compliance as well as try <a rel=\"nofollow noopener\" href=\"https:\/\/www.legaldive.com\/news\/doj-compensation-clawbacks-enforcement-cooperation-credit-white-collar-crime-monaco\/644119\/\" target=\"_blank\">to implement claw backs<\/a> for those exhibiting bad behavior could get penalties reduced if they enter into agreements with the DOJ, Deputy Attorney General Lisa Monaco said earlier in the month.<\/p>\n<p>\u201cNothing grabs attention or demands personal investment like having skin in the game, through direct and tangible financial incentives,\u201d she said, according to a report by Industry Dive sister publication Legal Dive.<\/p>\n<\/p><\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-5143531171910809\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- News - Bottom -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-5143531171910809\"\r\n     data-ad-slot=\"8320848692\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/defunct-katerra-sues-former-cfo-bonus\/645538\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dive Brief: Bankrupt construction startup Katerra Inc. is taking legal action against its former CFO, Matthew Marsh, \u201cto recover avoidable &#8230; <a title=\"Defunct Katerra sues former CFO for bonus\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/defunct-katerra-sues-former-cfo-for-bonus\/\" aria-label=\"Read more about Defunct Katerra sues former CFO for bonus\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-14655","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/14655","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=14655"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/14655\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=14655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=14655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=14655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}