Michelman & Robinson, LLP Files Wrongful Termination Suit for CFO James McKenna Against Forward Industries, Inc.

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Suit Claims Company Terminated Employment as Retaliation

Michelman & Robinson, LLP, on behalf of client James McKenna, filed a lawsuit on Aug. 26, 2014 against Forward Industries, Inc. (“Company”) and members of the Company’s Board of Directors (“individual defendants”). The suit, brought in the United States District Court, Southern District of New York (Case No. 14-cv-6944) alleges that McKenna was wrongfully terminated by the Company on the false pretext that there was “cause” to do so when in fact none existed. The lawsuit further alleges that the real reason for McKenna’s termination was retaliation for his whistle-blowing on alleged illegal and improper conduct of the individual defendants.

McKenna served as the Company’s Controller since 2003 and was selected as the Company’s Chief Financial Officer, Treasurer and Assistant Secretary in 2008. On Aug. 19, 2014, McKenna was terminated. McKenna claims that the Company and members of its Board of Directors purposefully hindered the performance of his duties as Chief Financial Officer. In addition, he noted several violations of the Company’s Code of Business Conduct and Ethics, which were reported by McKenna under the Code. McKenna’s suit alleges that he was terminated to avoid liability and to hide questionable activities by the individual defendants.

On Aug. 19, 2014, the Company was told that suit would be filed against it unless it rectified all its wrongdoing. The Company responded by filing a lawsuit the next day in the Supreme Court of the State of New York (Index No. 158237/2014) seeking a declaratory judgment that the termination of McKenna for cause was valid.

In McKenna’s federal whistleblower lawsuit, he asserts that he was terminated for bringing to light a number of reckless corporate activities by the defendants. The grievances filed to the Board include the failure to disclose details related to an acquisition by certain Board members and concern over the misrepresentation of McKenna in an inaccurate NASDAQ application. When McKenna demanded an immediate investigation by the Board, the Board did not take action.

According to the complaint, McKenna then filed a formal report on the allegedly fraudulent application, as outlined by several federal and state laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002. The filing goes on to explain that, once the report was filed, the Company proceeded to disseminate false information about McKenna internally and externally, resulting in his termination.

“The individual defendants continued to harass Mr. McKenna following his termination and made several inaccurate claims regarding his character as ‘cause’ for termination,” said Robert Piliero, counsel for the plaintiff.

According to the lawsuit, McKenna seeks redress for the retaliation leading up to and including his wrongful termination, the impermissibility of the termination under his contract with the Company, and the devastating impact these events have had on his highly accomplished career.

“Mr. McKenna believes that the individual defendants are attempting to sweep a number of issues under the rug, and we are working with Mr. McKenna to clear his good name and expose the improper actions that we believe have been taken by the Company and the members of the Board who are named as defendants. Once the facts are brought to light, we are confident that Mr. McKenna will be vindicated,” Piliero said.

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Penny Desatnik
Blattel Communications
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Robert Piliero
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