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Jul 17, 2019

Aimia sues former president over trade secrets allegedly emailed to his father


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MONTREAL -- Aimia Inc. has launched a lawsuit in a U.S. court against its former president after Nathaniel Felsher allegedly emailed "trade secrets" to his father, a New York-based investment adviser.

The lawsuit claims Felsher sent emails that included confidential drafts of a bid from a potential buyer to his father last October, six weeks after Aimia announced a tentative deal to sell its flagship Aeroplan rewards program to Air Canada.

Felsher denied in June claims of misappropriation in the lawsuit that was filed in March. The accusations have not been proven.

Aimia dismissed its former president last November, after he was in the position for less than three months.

Felsher acknowledges he emailed his father the bid -- dubbed "Project Green" -- but argues he had the right to use confidential information "as he saw fit" -- so long as he took steps to prevent its "unauthorized use" -- and that no trade secrets were used.

The court case is the latest revelation of conflict at a company rocked by shareholder backlash against the board as the loyalty analytics firm grapples with its future following the Aeroplan sale, which closed in January.

The lawsuit goes on to list other confidentiality complaints, alleging Felsher emailed his father financial forecasts and "banking matters" as part of a slide deck prepared in September for a board meeting of Big Loyalty, Air Asia's reward program in which Aimia has a 20 per cent stake and where Felsher briefly sat on the board.

"Throughout his employment, Nathaniel Felsher also sent hundreds of emails containing highly sensitive, confidential company information and trade secrets to his own personal Gmail account," the complaint states.

Aimia let Felsher go on Nov. 14 due to his "inability" to fulfil his executive functions, according to the lawsuit. The company discovered the emails afterward, it states.

A pair of laptops that Felsher returned to the company on Dec. 20 "had been professionally wiped," the filing says. But Felsher's response claims Aimia told him the devices were "his to keep."

Felsher rejects any wrongdoing. "None of the information emailed by the defendant to his personal email account or to his father 1/8Steven 3/8 was a trade secret or confidential," his court response states.

"More importantly, nowhere in its complaint does Aimia even attempt to show that either Nathaniel or Steven made any use whatsoever of the purported confidential information and trade secrets," another court filing reads.

Felsher suggests that he was not alone in emailing corporate documents to outsiders, alleging that chief executive Jeremy Rabe emailed him a 106-page memo for Project Green marked "Highly Confidential" in April, months before he signed on as Aimia's president. The document contained customer lists, a "meticulous" description of Aimia's technology platform and four years of financial projections, according to the defendant.

On May 10, two days after he was appointed CEO, Rabe sent a PowerPoint presentation to Felsher's Gmail account laying out "strategic options for the potential sale of Aimia's largest division" -- Aeroplan.

Felsher adds that he "was told that he should use his personal email account for particularly sensitive matters as his Aimia email was not private."

More mundane office hiccups also factor in to the defence. "He was only able to access his Aimia email account on his personal mobile phone. In order to view and/or comment on certain attachments sent to his phone, defendant had to forward the email to his personal email account and open it on his personal computer."

Aimia is asking the New York Supreme Court for damages stemming from alleged misappropriation of trade secrets and breach of fiduciary duty. Felsher has demanded the judge dismiss the case.

Arbitration over Felsher's compensation at Aimia is ongoing in Ontario.

Divisions continue to deepen at Aimia, whose largest shareholder raised objections Tuesday to how the company went about appointing two new directors in the latest escalation of tensions between management and investors.

Mittleman Brothers LLC, which owns or controls about 23.3 per cent of Aimia's outstanding shares, said the company did not consult it on the directors it appointed Monday -- just 17 days after the company's annual meeting.

The appointments came as the company faces pressure from a group of shareholders who are calling for a redo of Aimia's annual meeting that was held last month that they say was "plagued with irregularities," such as refusing to take questions.

Aimia has said the annual meeting was "conducted in accordance with all applicable rules" with questions handled one-on-one afterward, and that a repeat would be "redundant."