Sandy Cloud and Jim Wehr have resigned from Back9Network’s board of directors, the company said.
The two men resigned because they are both board members of The Phoenix Cos. — where Wehr is president and CEO — which is a landlord and major creditor of Back9. The fledgling media company is housed in Phoenix’s Boat Building.
Back9 suspended operations last month because it failed to raise enough money to keep going.
Cloud and Wehr would have a conflict of interest if Back9 filed for bankruptcy, because Phoenix would be listed as a creditor.
“Their resignations from Back9’s board were primarily driven by this potential conflict of interest,” Back9 said in a statement Thursday, adding that its management team continues to seek long-term financing.
Back9 investor and former CEO James Bosworth, who was sued by Back9 over allegations that he disclosed financial information to potential investors in violation of his separation contract, released a statement Thursday about the resignations:
“I take no pleasure in seeing that Sandy Cloud resigned from Back9 and indeed I wish him well in his future endeavors. That said, as Back9’s largest shareholder it comes as welcome news that – finally – new leadership will be in place. Back9 has been sliding backwards since I was forced out last June. Back9 is obviously in a bad position at the moment, but make no mistake, it is not dead. With new leadership the company can rebound and thrive. I will continue to do everything in my power to see Back9 succeed. I still believe Back9 will recover and I will do all I can to see that it does.”
A spokesman for Back9 said Friday morning that the company had no comment on Bosworth’s statement.
