A lawsuit that painted augmented reality helmet maker Skully as rife with fraud and yet another example of Silicon Valley’s ethical lapses has been dropped.
A press release was issued by the cofounders that included a statement from the plaintiff, Isabelle Faithauer — a former executive assistant to former Skully CEO Marcus Weller and his cofounder/brother Mitch Weller. Faithauer said new information had to come to her attention that convinced her to drop the lawsuit:
I worked at Skully, Inc. from May 2014 to December 2015. In developing the company, Marcus Weller and Mitchell Weller came up with a great concept for the business and it was a good place to work. After I was let go by the company, I was upset and hired an attorney who filed a lawsuit against Skully, Inc., Marcus Weller, and Mitchell Weller based on my understanding of the facts and circumstances at that time. However, through discovery, I learned that there were many facts, documents, and information that could lead a reasonable jury to conclude that my claims were totally without merit. My attorney concurred in this assessment, which is one of the reasons I dismissed my claims against the Wellers and agreed to settle for a mutual release of claims. I wish Marcus Weller and Mitchell Weller good luck in their future.
VentureBeat reached out to Faithauer via her LinkedIn profile and to her attorney via email and will update this story if they provide further information or comments.
Faithauers’ lawsuit caused a sensation when it was first revealed in August 2016.
But in August 2016, Skully announced it had run out of money and was shutting down:
“Over the past several weeks, our management team has worked feverishly to raise additional capital, but unforeseen challenges and circumstances beyond our control made this effort impossible. What this means now is that SKULLY will no longer be able to ship AR-1 Units or process refunds directly.”
That made for a lot of furious crowdfunding backers. But the company descended from crowdfunding disappointment to poster child for Silicon Valley’s ethical failings when Faithauer filed a lawsuit against the cofounders accusing them of fraud. She claimed they required her to fudge the company’s bookkeeping to hide that fact that they were spending large sums of money on exotic car rentals, personal travel, and strip clubs.
The press release doesn’t offer any additional details about what new information emerged during discovery.
Skully cofounder Marcus said in a statement that they company had always denied the allegations:
In 2016, there were a number of claims made against us by a former employee. At the time she filed the lawsuit, we adamantly denied those claims, and advised those who contacted us that they were incorrect. We are glad this has finally been dismissed. It has been painful process to say the least, but with the latest news we believe there is reason to be hopeful for the future.
Surprisingly, amid all the drama, the Skully helmet lives on. The brothers said they worked to help sell the assets. An initial deal with Chinese company LeEco was “blocked,” according to the press release. The assets were later sold to Torrot, a Spanish urban mobility company that moved the Skully operations to Atlanta.
The helmet has been renamed Fenix, and the press release says the new owners are “working to ship units to the remaining customers.”