Bitter KiOR dispute boils over online, as six new documents surface

September 9, 2014 |
Troubled KiOR's Columbus, MS project

Troubled KiOR’s Columbus, MS project

6 new documents surface in SEC filings, tracing more background in the stormy battle between KiOR and former company director Paul O’Connor. 

O’Connor called for entire management team to resign. Pointed to troubles in R&D back in 2012. “I cannot just stand back and watch,” he writes in 2013.

In today’s Digest, we publish a series of six documents that were filed in the past week with the SEC, relating to KiOR, and a growing dispute between the company’s Board — and an individual director, Paul O’Connor.

It is important to note KiOR’s response:

“The Company intends to continue to vigorously respond to allegations by Mr. O’Connor that it considers to be false, misleading or inappropriate and is currently considering all of its options, including the possibility of legal action against Mr. O’Connor.”

As KiOR’s response becomes public, The Digest will publish it.

At the same time, it would be unfair to dismiss O’Connor’s assessment without a fair hearing, either. As O’Connor notes on his Board resignation letter:

“The KiOR technology to convert waste biomass into fuels and chemicals via catalytic pyrolysis (or cracking) originated from a Dutch company called BIOeCON, which invented and explored this concept in 2006 and 2007. I am one of the principal inventors of this technology. Other key inventors are Prof’s Avelino Corma, Jacob Moulijn, Dr. Dennis Stamires, Dr. Igor Babich and Sjoerd Daamen B.Sc. all working and cooperating with BIOeCON since early 2006.

“During the first two years of KiOR 2008-2009, I worked as CTO with Fred in building up the organization, proving the concept in a modified FCC pilot plant and leading the research into improved catalysts.”

And O’Connor adds in an April 21st memo: “As one of the few directors of KiOR with a technical background I feel I have a special responsibility to critically review the progress being made at KiOR in the fields of Technology and Research & Development.”

The dispute between KiOR and O’Connor, as we reported yesterday, revolves around “(i) an instance in which Mr. O’Connor withheld a third party technology report, paid for by the Company, from the Board and management, (ii) an instance of unauthorized communications with persons during the course of the Outside Counsel Review and (iii) the possibility that Mr. O’Connor failed to comply with the Company’s insider trading policy.”

Yet, in his resignation letter, which we publish today — issues of the viability of KiOR’s technology as it had developed; questions raised about transparency; questions raised about the abilities of the KiOR management team to meet the technology challenge, and more.

In his resignation letter, O’Connor states:

“I am of the opinion that KiOR’s MT professionally has not performed in evolving the KiOR technology to a commercial success; furthermore the MT in my opinion has not provided the board of directors of KiOR with the adequate, right and relevant information to do their job. I therefore am of the opinion that the MT needs to resign and to be replaced in order to improve the chances of success of KiOR and/or any other potential new ventures based on KiOR technology in the future.”

In today’s Digest, on account of length, we are publishing each of the documents separately and sequentially. We have added appropriate illustrations in the form of plant photos and logos — but none of these were a part of the original documents. Where you see a (**) symbol, this represents information withheld from the public and filed separately with the SEC.

Here are the links to each:

The March 15 2012 O’Connor email memo
The March 22 2012 O’Connor technology assessment
The April 21 2012 O’Connor technology assessment
The April 30 2012 O’Connor memo
The Spring 2013 O’Connor note
The August 31 2014 O’Connor resignation letter

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