then we elected a couple of our founders to the board. So now we had a threeto-
two board majority.
Livingston: Where did you physically do this?
Greenspun: We did it by letter actually. We did it in the lawyers’ office downtown
at Edwards and Angell.
I knew that they wouldn’t like this, and I wanted to keep things as orderly as
possible, so I called up the old CEO—whom I think we had elected COO, so
we had demoted him to chief operating officer and kicked him of the board—
and I said, “Let’s face it; you’re just not qualified to run this company. You’re
losing money. But we don’t want to have any disruption, and you are a good
manager and maybe someday you can learn enough to be CEO, but that’s not
today.” We tried to make it conciliatory—“We’re not going to change anything,
we’re not going to go on a mass firing spree, but we have to get this company
back into being cash-flow positive because, whether you know it or not, you’ve
lost a lot of money.” They still didn’t know it, because their accounting was all so
inaccurate; they had no idea. They hadn’t been audited yet. Their accounting
Philip Greenspun 335
firm hadn’t come in and shown them all their mistakes. Basically, they were
flying solo.
Then Jin and I went off to California for some reason, on a guy’s road trip to
California and having a great time. When we got back to Boston, we discovered
that we’d been sued. Me, Eve, and Tracy got sued in Delaware Chancery
Court. I thought, “God damn that lawyer, Sam, he lied to me; he told me we
wouldn’t get sued!” And I later realized that Sam had been right and wrong.
They still had control of the company checkbook. Even after he’d been voted
out as CEO and the new board had been voted in, the VCs had gotten their pet
CEO to write a $1 million check from the company checking account to their
lawyers so that they could have this shareholder lawsuit without paying for it.
This was an unauthorized looting of the company on behalf of one set of shareholders.
It was probably illegal, but in Massachusetts it could take years to
recover that kind of money. And they figured it’s not going to be a big deal
because we’ll still have control of the company; we’ll impoverish this guy with
an onerous lawsuit. He’ll never have enough money or staying power to come
after us in Massachusetts for looting, and maybe he’ll never find out.
So now I had to defend this lawsuit. I had to hire Delaware counsel, which
was very expensive. It basically consumed all my assets over 2 1/2 months. But

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