Daniel Pidgeon, board chairman of Starpower Home Entertainment Systems, is suing his family for being “wrongfully terminated” from the company that he helped found 23 years ago. Pidgeon, the youngest of four brothers and Chief Financial Officer for the Starpower retail business, is seeking $5 million in damages.
In a lawsuit filed in the District Court in Dallas County, Texas, Pidgeon alleges a series of unlawful practices by his brothers David, Michael, and Steven; his father Barry; and acting Chief Operating Officer Tom Schurr, which include wrongful termination, defamation, and willful violation of Starpower’s corporate bylaws.
His actions and account of the situation starkly contrast comments made by his brother David, the CEO of Starpower. Dallas News reports that in a Starpower email to employees, David said that Daniel had voluntarily “agreed to leave the company.”
However, Daniel alleges in the suit that his brothers held a secret and unlawful board meeting in which they conspired to remove him from the company. He then claims that he was then asked for his keys and company phone, and even threatened with arrest if he set foot on the premises of any Starpower location. The suit also says that his access was cut off to his only email account, containing files that include personal financial and tax information, medical documents, and “other personal documents essential to him and his family’s daily life.”
“It’s an unfortunate turn of events,” Mikel Bowers, Daniel’s attorney, said in a phone call with Dealerscope. “Daniel’s brothers left him with no other option. This was something that was very difficult for him to do and was really a last resort after several failed attempts to negotiate a buyout one way or the other.”
Starpower, which operates a handful of consumer electronics stores in Texas and Arizona, quickly established itself as a stalwart in the CE retail industry, becoming a trailblazer in experiential retailing. Over the past two decades, Starpower grew its business well beyond just traditional retailing, offering a number of installation services for both residential and commercial clients, providing a blueprint for survival for other retailers trying to compete with big box. Starpower Home Entertainment Systems is the parent company of Starpower the electronics chain and Star Floors, a more recent venture that focuses on flooring installations.
According to the suit, the family dispute stems from a disagreement over the “financial crisis” that Star Floors was facing. Pidgeon alleges that, at a family meeting to discuss how Star Floors could “once again achieve financial success,” he was asked to put forward $100,000 to cover current and upcoming expenses and current debts. Daniel, who said he’s not involved in the day-to-day management of Star Floors, requested to see recent financial statements for Star Floors, which he said shed light on “Michael and Steven’s inability to successfully run Star Floors.”
Daniel offered his family two potential solutions, according to the lawsuit: they could buy out his shares in the company and use those funds to help Star Floors, or he could buy out their shares and put those funds towards the struggling branch of the company. Daniel proceeded with the option of buying out his brothers, and provided them, on three separate occasions, with letters of intent to purchase their shares. It’s at that point, according to the filing, that the family held a Board of Directors meeting—without informing Daniel and at least one other director—and voted to remove him.
“Companies are duty-bound by their bylaws—whether their shareholders are family, friends or business associates,” Bowers said. “What occurred within this shareholder group is a total disregard for corporate governance accompanied by deliberate defamation and disparagement.”
In a statement made to TWiCE over the weekend, David Pidgeon said he was doing what he felt was “best for the company,” and wished his brother well in his “future professional endeavors.” David has been contacted for additional commentary as the story develops.
Daniel is the immediate past chair of the Consumer Technology Association’s executive board, a member of its distinguished Board of Industry Leaders, and is a member of the Dealerscope Hall of Fame.