A legal battle involving Bolt founder Ryan Breslow and some of the company’s largest backers has taken an unexpected turn as BlackRock, Hedosophia, and Untitled Ventures filed an objection to a settlement that Breslow had reached with Activant Capital over a $30 million loan. The settlement, which would have cancelled a portion of Breslow’s shares as repayment for the loan, has been halted by a Delaware Chancery judge, causing Activant to be blocked from selling back its stake in the company.
The dispute stems from a 2021 loan that Breslow secured against Bolt’s assets, which he reportedly defaulted on after excessive spending. Activant Capital sued Breslow for allegedly enriching himself at the company’s expense, leading to the settlement that would have eliminated Breslow’s debt while allowing him to retain control of the board. However, the objection filed by the major investors suggests that Breslow may have been using Bolt’s funds to buy out shareholders who opposed him personally, potentially benefiting himself and Activant over other investors.
The settlement would have involved the cancellation of millions of Breslow’s shares worth around $37 million, along with the repayment of Activant’s investment and legal fees. However, some shareholders, including the objectors, believe that the terms of the settlement may not be fair to all parties involved. Breslow has maintained his innocence throughout the process, claiming that he had the right to make changes to the board and explore avenues for remuneration, although he did not respond to a request for comment.
Bolt’s financial situation has also been affected by recent buybacks of shareholder stock and layoffs of approximately 29% of its staff. The company’s CEO, Maju Kuruvilla, was replaced by Justin Grooms earlier this year, and Breslow himself resigned as chief executive weeks after a Series E funding round valued the company at $11 billion. The Securities and Exchange Commission conducted an investigation into allegations that Breslow misled investors during fundraising, but ultimately decided not to take action against the company.
As the legal battle between Breslow, Activant Capital, and major investors continues, Bolt finds itself in a precarious financial position, with dwindling cash reserves and ongoing turmoil in its leadership ranks. The outcome of the settlement objection and the broader implications for Bolt’s future remain uncertain, but the company’s ability to navigate these challenges could have significant implications for its long-term viability in the competitive fintech industry.
