Kainos Capital said March 26 that it filed an answer and counterclaims in Delaware Chancery Court against Sarah Bradley, a partner and co-founder who sued the Dallas private equity firm in January. Kainos, in its counterclaims, alleges breach of contract and breach of fiduciary duty against Bradley. The buyout shop said emails and other evidence show Bradley “understood and agreed to changes in her ownership interest and the firm’s governance.” Kainos claimed that from October 2018 to January 2019, while the PE firm was working to launch its third fund, Bradley deleted thousands of relevant e-mails from Kainos’s servers in an attempt to destroy evidence, a court filings. “Ms. Bradley’s case is a baseless attempt to extort a financial settlement,” Kainos said in a statement. “Ms. Bradley’s actions are not those of a partner or a fiduciary and should not be rewarded.” Bradley, who is still listed on the Kainos site as a partner, claimed in a Jan. 25 lawsuit that Kainos cofounders perpetrated a fraudulent scheme to steal her 25 percent stake in the firm’s investment manager, Kainos Capital. See the Kainos counterclaim here
KAINOS CAPITAL FILES ANSWER AND COUNTERCLAIMS AGAINST SARAH BRADLEY
Kainos Capital (“Kainos”), a leading food and consumer-focused private equity firm, today announced that it has filed an Answer and Counterclaims in Delaware Chancery Court against Sarah Bradley. Kainos’s Counterclaims against Ms. Bradley allege Breach of Fiduciary Duty and Breach of Contract.
Kainos issued the following statement regarding the lawsuit:
“Ms. Bradley’s case is a baseless attempt to extort a financial settlement. Our Answer and Counterclaims outline how Ms. Bradley threatened litigation just days after she held herself out to the investment community as a principal in a fundraising effort and directed the broad distribution of confidential materials so that her lawsuit would inflict maximum harm on the firm, her colleagues and investors. At the same time, she was simultaneously deleting thousands of her company emails that could be relevant to the litigation. Ms. Bradley’s actions are not those of a partner or a fiduciary and should not be rewarded.
“Contrary to Ms. Bradley’s claim that the changes in her ownership in 2016 were part of some surreptitious plot, our filing details contemporaneous emails and other documentary evidence demonstrating that she understood and agreed to changes in her ownership interest and the firm’s governance. These changes were included in due diligence materials that she personally distributed to potential investors and in Kainos’s public disclosures, and reflected the natural evolution of a growing firm that was raising larger funds, admitting new partners, and attracting and retaining key talent. Ms. Bradley’s gratuitous and false allegations about the firm’s culture, which contradict numerous statements she has made as detailed in our counterclaims, are a self-serving effort at a public smear campaign and are not relevant to her commercial dispute.
“The entire Kainos investment and operations team remains focused and committed to creating value for our investors.”
Kainos Capital is a middle market private equity firm with an exclusive focus on the food and consumer sector. The Kainos team has extensive investment and operating experience in the industry, having invested more than $2 billion of equity in more than 65 transactions with a total transaction value of more than $10 billion.