WakeUpNow Sues Ex-CEO Kirby Cochran For Over $70 Million
Update: On April 10, 2015, Wake Up Now, Inc., Global Connections Network, U.S.A., LLC , Kirby Cochran, and certain other defendants and third parties entered into a settlement agreement wherein all claims, including proposed counter-claims and third party claims, have been settled.
The WakeUpNow business opportunity has come to an end, but the story is not over. WakeUpNow has sued their Ex-CEO for over $70 Million. The court filing reveals insider dealing that is very eye opening.
Here is the story strait from the WakeUpNow lawyers:
Kirby Cochran Gets His Nose Into The WUN Tent
In December 2010, Kirby Cochran, who previously had no involvement with Wake Up Now, learned through his brother Gary C. that the management of Wake Up Now was interested in going public.
Kirby Cochran, acting as a middle-man, orchestrated a going public shell merger wherein Wake Up Now, an operating Utah corporation, was acquired as a subsidiary by a Delaware publicly traded corporation, trading/ticker symbol “WORC”. In connection with the merger, the Delaware publicly traded shell corporation parent changed its name to Wake Up Now, but kept its trading/ticker symbol WORC.
Wake Up Now later discovered that, near the time of the transaction, Kirby Cochran’s brother and co-defendant Gary C. secretly purchased a large percentage of WORC’s public float (Stock).
Wake Up Now has also recently discovered that, at the time of the transaction, Kirby Cochran, who was not a licensed broker, was negotiating both sides of the deal. He induced the public shell company to issue significant shares of stock to Wake Up Now founder Troy Muhlestein to close the acquisition, but then surreptitiously induced Muhlestein to deliver to Kirby Cochran’s possession, medallion guaranteed stock certificates evidencing at least 6,412,500 of those shares, which Kirby Cochran promised to hold for Richard Smith and others (“Nominee Shares”). The naïve and trusting Mr. Muhlestein complied as directed by Kirby Cochran, leaving him with only 2,137,500 shares for the company that he founded and continued to run.
Kirby Cochran, who was an adjunct business professor at the University of Utah, requested that one of his business students set up a company to hold the 6,412,500 Nominee Shares in a name not traceable to Kirby Cochran. On January 24, 2011, Kirby Cochran’s student complied and incorporated Vestry Consulting Services, L.L.C. (“Vestry”) in Utah. Cochran then caused the Nominee Shares to be transferred to Vestry.
Kirby Cochran Infiltrates WUN
Later in 2011, with CAREIC and Clear Peak both driven to insolvency and ultimate bankruptcy due in large part to Kirby Cochran’s gross mismanagement and insatiable appetite for uncapped expense accounts, first class travel, fine hotels, fine restaurants, company cars, home office allowances, and salaries to his children, spouse and siblings, Kirby Cochran targeted Wake Up Now as his next “piggy bank”.
As he had done at CAREIC, as CEO at Wake Up Now, Kirby Cochran attempted to take total control of Wake Up Now by causing the resignation of all dissenting board members, such as founder Troy Muhlestein and early director Jon Holbrook, causing the Board to grant him two board votes, ceasing all stockholder meetings, and ceasing all formal board meetings. Indeed, during his tenure, Wake Up Now held no stockholder meetings and only one board meeting. Kirby Cochran also caused the termination or resignation of all dissenting employees and members of management.
As another tactic to ensure his desire to control matters, Kirby Cochran created a substantial number of secret side-deals and promises with employees, managers, and investors with the implicit requirement that in order for the counter parties to profit from the side-deals, loyalty to, and protection of, Kirby Cochran was required.
Kirby Cochran Fails to Adequately Perform as Wake Up Now CEO and is Terminated
As CEO, Kirby Cochran caused excessive personal and corporate expenditures despite the Corporation’s relative cash positions, engaged in side-dealings with employees and affiliates, engaged in undisclosed and/or veiled agreements with family members, including Gary C., failed to adequately plan to avoid repeated financial emergencies, nearly unilaterally caused multiple severe business disruptions and costs due to his personal insistence on internally developing software to perform critical business processes despite the existence of cost-effective off-the-shelf alternatives, distraction from personal judgments and other legal issues due to past business dealings, and negatively affecting corporate morale by installing surveillance cameras throughout employee work areas, and creepily commenting to attractive young women that he was watching over them.
Kirby Cochran caused the HUB to be launched without sufficient development and with no beta testing. The HUB was virtually non-functional at the time of launch. Astonishingly, Kirby Cochran’s hand-picked development team had somehow destroyed the former functional HUB system in the process of launching the new HUB. There was no going back.
The result of the HUB debacle was disastrous. WUN became nearly totally blind to its business functions. It was unable to confirm delivery of its product, unable to determine whether products were paid for. WUN’s call center had wait times for over 4 hours with disgruntled customers and IBOs who were unable to purchase product, unable to log-in to receive product, and IBOs unable to view their accrued commissions.
Kirby Cochran also wasted approximately $2 million dollars by purchasing and attempting to reboot the Southeast Asian operations of Veyea, Inc., a failed MLM started by James Watson, a former HR director of Utah based MLM Neways. Together with Mr. Watson, Kirby Cochran and his son collectively spent months in Malaysia, Thailand and Vietnam without evidence of any work being accomplished. Kirby Cochran even caused WUN to hire private, personal security to stop IBOs from being able to interact with him.
Kirby Cochran’s gross mismanagement, side-deals with family members to pay out all of WUN’s profits, lavish expenditures, failed business initiatives, and the botched HUB launch placed WUN in a position where it needed millions of dollars to survive.
Due to the foregoing, on September 27, 2014, WUN stockholders owning a majority of the voting shares of WUN removed Kirby Cochran from the WUN board of directors. That same day, the remaining members of the Board of Directors voted to have Kirby Cochran take an unpaid leave of absence as CEO for a period of at least 6 months, leaving him with the title of “Chairman” (despite being terminated from the Board). Kirby Cochran was instructed that day that he was no longer welcome to have an office on the WUN premises.
Kirby Cochran goes on the War Path
Kirby Cochran was indignant. He immediately went to the home of Richard Smith, one of WUN founder Troy Muhlestein’s original key advisors, and invited Mr. Smith to join him in creating a new company to compete with WUN during a wild drive where Kirby Cochran sped through a windy canyon road.
Moreover, a few days later Kirby Cochran attempted to cherry-pick and recruit several of WUN’s employees, including Josh Daily, who was the primary contact point for all of WUN’s primary digital product vendors. Cochran also solicited its principal office manager.
Some of Kirby Cochran’s comments turned from defamatory to threatening. Kirby Cochran claimed to at least one WUN employee that he had major leverage over WUN and that it was “safe” to follow him, explaining that “If I don’t get everything that I am asking for, I’m going to drop an atomic bomb on this place”, suggesting that he would devastate WUN.
Due to the behavior described above in the preceding paragraphs, on October 16, 2014, WUN’s board of directors permanently terminated Kirby Cochran from all positions at WUN, including CEO and “Chairman”. Prior to October 16, 2014, Kirby Cochran gave no notice that he had resigned as Chairman or any other position with Wake Up Now.
Kirby Cochran Creates Global Connection Network
Kirby Cochran then formed and/or become involved with as CEO of “Global Connection Network” and caused it to commence competing directly against WUN, in the same markets, with similar products, in violation of his covenants with the company. Kirby Cochran is now aggressively marketing to many of WUN’s most important IBOs and customers using the IBO customer information entrusted to his while he served as WUN’s CEO.
All I can say is you can’t make this stuff up! Wake Up Now was a total mess of a company. I have no idea why the SEC is not all over this insider trading. Kirby Cochran failed to mention any of this in his “Secret” agenda for Wake Up Now video.