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Business litigation portends big recovery for Vungle’s co-founder

Disputes between top executives and their former companies often occur in Oregon and elsewhere. Sometimes, an individual who was instrumental in founding and creating a company is deactivated by the board of directors for improper or inadequate performance issues. This can lead to bitter business litigation regarding the right of the board to take such action against a key corporate executive.

That fact scenario is playing out in a neighboring state where a co-founder of a mobile advertising company was removed from his position as chief executive officer by the board. Zain Jaffer, a co-founder of Vungle Inc., sued his former company for terminating his employment without justification. The controversy arose in 2017 when police arrested Jaffer when he was found unconscious in his home.

The specific charges brought against him at that time by authorities is unclear. However, the District Attorney dropped all charges against Jaffer and stated that he was innocent. The prosecutor stated that the man had become unconscious from the apparent legal use of prescription medication. California law explicitly bars employers from terminating employment on the basis of charges that do not result in a conviction, the lawsuit alleges. The complaint also asserts that the company took illegal actions against Jaffer after the charges were dropped.

The company tried to stop him from buying new shares and from transferring his shares, the lawsuit claims. It is also alleged that the company tried to destroy Jaffer’s career by various additional illegal actions against him. The battle contains an ironical twist in that he is still the individual with the highest voting powers of any shareholder in the company and he is the second-largest shareholder. That remaining position of voting power puts him in a strong strategic posture to exert substantial takeover or other practical moves in the event that he wins or obtains a settlement in this business litigation matter. Similar case are litigated in the state and federal courts located in Oregon.

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