Cybereason Inc.’s CEO, Eric Gan, has filed a lawsuit against two major investors—former Treasury Secretary Steven Mnuchin and the SoftBank Vision Fund (SVF)—alleging that their rejection of critical financing proposals is pushing the cybersecurity software company towards bankruptcy. The company claims that if immediate funding isn’t secured, it may be forced into Chapter 11 bankruptcy.
According to the lawsuit filed in Delaware Chancery Court, Gan accuses Mnuchin and SVF of using their board positions to block a proposed $150 million capital infusion, which would have been essential to the company’s survival. The suit asserts that the investors rejected multiple financing proposals not due to the company’s financial health but to preserve their control and financial interests in the company.
Cybereason, which is facing a looming debt repayment to JPMorgan Chase & Co. due on March 11, has proposed a plan to raise $150 million, but the complaint alleges that Mnuchin and SVF have systematically opposed these plans. Their refusal to approve the financing has led to internal turmoil, with tensions growing among board members.
The lawsuit also claims that Mnuchin’s firm, Liberty Strategic Capital, and SVF attempted to arrange a financing deal that would have excluded management from the process, consolidating more control in their hands. The financing proposal, which was non-binding and expired, reportedly included an “exclusivity provision” that would limit Cybereason’s ability to seek funds from other sources.
Gan and his family office hold about 6.8% of Cybereason’s shares, while Mnuchin’s Liberty Strategic Capital controls around 6.6%, and SVF owns roughly 20%. Despite their significant stakes, both Mnuchin and SVF director Daniela Llobet, also named in the lawsuit, rejected all 13 proposals to raise funds.
In a response, a spokesperson for SVF, a unit of SoftBank Group Corp., expressed confidence in defending against the lawsuit, calling the claims meritless. Meanwhile, Cybereason’s board has been embroiled in conflicts, with Ken Miyauchi, SoftBank’s representative, reportedly expressing frustration with the conduct of both SVF and Liberty’s directors but refusing to attend board meetings due to internal disagreements.
As the company faces significant financial strain, the outcome of this legal battle could have serious implications for Cybereason’s future.
