SPRINGFIELD — Republican Bruce Rauner
had a quick answer when asked to assess blame for the fast collapse of a
once-promising business venture created and backed by his one-time Chicago
investment firm. Christine Kirk.
The accomplished CEO he recruited from
a high-flying national accounting firm couldn’t make their business-outsourcing
firm, LeapSource, based in Tempe, Ariz., profitable because he said she didn’t
share his vision of what makes a “good company.”
“The only thing Chris did on a
consistent basis, on a timely basis, was spend,” Rauner said. “That’s the easy
thing to do.
“The hard thing is getting customers;
the hard thing is cutting expenses; the hard thing is laying people off. But
that’s what good companies do when times are tough, and she just would not do
it,” said Rauner, who sat on LeapSource’s board.
That statement comes from a June 2005
deposition that arose from litigation over a messy corporate divorce between
Kirk and Rauner and his business partners at Chicago-based investment firm
GTCR.
Her lawsuit against him, GTCR and several of its partners offers a firsthand look into Rauner’s business philosophy. It’s a philosophy Rauner has fine-tuned over the years that he repeatedly has said forms a cornerstone of what kind of Illinois governor he would be as he runs to unseat Gov. Pat Quinn. The lawsuit was settled in 2008 after a judge threw out most of the counts for a variety of legal defects.
The court case provides an unusual
window into Rauner’s actions while under the stress of immense financial
pressures, his attitude toward claims of hostile work environment and the
tactics he employed when it appeared certain that Kirk intended to sue to challenge
the start-up’s dismantling.
Kirk alleged in the lawsuit that Rauner threatened her personally and through a LeapSource board member — a claim she made in a sworn deposition. That former LeapSource board member confirmed in a deposition that “threatening things...were said to her” and that he had been involved in some of those conversations. Rauner denied the allegations through a spokesman.
The lawsuit alleged that Rauner told
Kirk in February 2001: “If you go legal on us, we’ll hurt you and your family.”
Kirk also alleged that Rauner, wary of
a her possibly suing, relayed a similar threat to her a few days earlier
through another board member, Thomas Gilman, a consultant and ex-top executive
at Chrysler Financial.
“I will bury her,” Rauner is alleged to
have told Gilman.
“I will make her radioactive,” Rauner
allegedly told Gilman, according to the complaint. “She will never get another
job anywhere, ever. I will bankrupt her with legal fees. I don’t know if she
has a family or not, but if she does, she better think twice about this.”
Gilman declined to comment.
A federal judge threw out most of the
lawsuit, including the counts containing the allegations involving the threats.
The judge, though, did not make a determination on the credibility of those allegations.
With part of the case still intact,
Kirk and GTCR agreed to settle in 2008, with GTCR agreeing to pay $511,000 to
Kirk, Gilman and six other plaintiffs, all of who were LeapSource employees.
What makes the LeapSource case unique
among the dozen subsidiaries that went bankrupt during Rauner’s watch at GTCR
is that in this case, his own voice is accessible through excerpts of his court
deposition — most of which is still under seal — and in transcripts from a
series of board meetings that Kirk recorded in her closing weeks as CEO.
On Monday, a Rauner aide strenuously
denied he ever threatened Kirk.
“It’s no surprise these false
allegations were dismissed in summary judgment, which means the complaint had
no merit in the eyes of the judge,” Rauner spokesman Mike Schrimpf said in a
statement.
A GTCR spokesperson did not respond
Monday to questions about the case…
Rauner and GTCR succeeded in having
nearly all of Kirk’s case against them tossed out because in part it wasn’t
proven they had “breached the fiduciary duties of loyalty and due care, which,
indisputably, are the touchstone of corporate governance,” U.S. District Judge
Robert C. Broomfield wrote in his opinion. But Broomfield characterized the way in
which Rauner and his co-defendants conducted themselves.
“At the end of the day, it appears that
plaintiffs were displeased because at nearly every step of the way, from
negotiating the original purchase agreement to the wind-down operations,
defendants chose to ‘play hard ball,’” the judge said.
Dave McKinney is the Sun-Times
Springfield bureau chief. Carol Marin is a Sun-Times columnist and political
reporter at NBC 5 News where Don Moseley is a producer.
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