Sigma Lithium, eyeing buyout, sues ex-CEO and daughter-in-law over trade secrets

22nd August 2023 By: Reuters

Sigma Lithium, eyeing buyout, sues ex-CEO and daughter-in-law over trade secrets

Grota do Cirilo is a “Tier-1” operation that is among the biggest and highest-grade hard rock lithium deposits in the world. Sigma Lithium is expected to be a top 5 lithium producer globally upon achieving full-scale commercial production at its Grota do Cirilo project.

NEW YORK - Sigma Lithium, which produces metal used in electric vehicle batteries, has sued a former co-chief executive officer, accusing him of stealing trade secrets to undermine the company's effort to sell itself.

The complaint was filed on Monday in federal court in Manhattan against Calvyn Gardner, who until January was Sigma's co-CEO with Ana Cabral-Gardner, who he is divorcing and who remains CEO. Luisa Valim, Gardner's daughter-in-law, is also a defendant.

Gardner's law firm did not immediately respond to requests for comment on Tuesday. It is unclear whether Valim has a lawyer, and she could not immediately be reached.

Sigma is based in Vancouver, British Columbia, but operates mainly in Brazil, and had a market value of about C$5.07=billion (US$3.74-billion) on Monday.

The lawsuit said Cabral-Gardner and Gardner lead a fund, A10 Investimentos, with a 44% stake in the company, with Cabral-Gardner owning 76% of the fund and Gardner owning 24%.

According to Sigma, Valim hatched a scheme to steal proprietary information "for leverage and revenge" and to gain more favor with her father-in-law, after learning he might not be legally entitled to half the marital assets in the divorce.

Sigma said that soon after leaving the company in May, Valim downloaded and shared with Gardner about 80 000 confidential documents from a data room to which Bank of America, which has been working on talks with potential buyers of Sigma, coordinated access.

According to Sigma, these documents included industrial and mining documents that were the "secret sauce" of its business, and which if misappropriated would take away its key competitive advantage against lithium mining and processing rivals.

Sigma said Valim and Gardner's actions were "designed to interfere" with a possible buyout, and Valim boasted to an A10 partner on a July 1 airplane flight that because of the scheme "the M&A process was 'over.'"

The lawsuit seeks unspecified damages and the return of misappropriated property.

In a July 28 interview, Cabral-Gardner said Sigma has been looking to strengthen its "unique environmentally competitive position" in the global supply chain.

"The company is the asset," she said.

Bank of America declined to comment.

The case is Sigma Lithium Corp v Gardner et al, U.S. District Court, Southern District of New York, No. 23-07403.