Parker H. Petit, a frequent Georgia State donor, has been officially removed from his former company’s board of directors following an internal investigation by the company’s audit committee.
Petit served as the CEO and chairman of the board of MiMedx Group Inc., a Marietta-based company. He resigned on June 30 amid mounting pressure from federal investigations into the company and a restatement of company financial records over the past five years.
On Aug. 21, The Signal reported on a potentially fraudulent stock donation made by Petit to the Georgia State University Foundation. Now, a little more than a month later, it has been announced through a MiMedx press release that his resignation, among others, was justified due to “conduct detrimental to the business or reputation of [MiMedx].”
The press release stated the board of directors “announced separations of four senior MiMedx executives – Parker H. Petit, William C. Taylor, Michael J. Senken, and John E. Cranston (collectively, the “Separated Employees”) – be treated as terminations ‘for cause’. The Compensation Committee separately reached this determination as well. These determinations are based on information identified as part of the Audit Committee’s ongoing independent investigation.”
Now, the company is instituting a clawback campaign to repossess stock benefits and other financial assets gained by the separated employees over the past several years.
Petit and Taylor, the company’s former president and COO, have since enlisted the legal representation of Bill Weinreb, from the firm Quinn Emanuel. Both Petit and Taylor believe they were fired from MiMedx without cause. Weinreb has previously represented several executive clients accused of fraudulent business practices.
“I am extremely disappointed by the Company’s decision and by the manner in which it was reached. The investigators conducted an unfair investigation that has needlessly damaged employee morale, productivity, and shareholder value,” Taylor said in a press release.
Weinreb also called into question the motives of the auditing committee that concluded Petit and Taylor had negatively impacted the reputation and image of MiMedx.
“The internal investigation that led to today’s announcement has spun out of control. Shareholders should question whether the Audit Committee, which has led the investigation, is acting in the Company’s best interests or its own best interests in finding others responsible for accounting matters for which the Committee itself bears ultimate responsibility,” he said.
Petit and the other three executives that originally resigned are being forced to return company assets, such as “outstanding equity and incentive awards,” according to the Atlanta Journal-Constitution (AJC).
They also must return compensation originally granted to them by MiMedx’s board of directors and compensation committee.
“In addition, the Board and the Compensation Committee have determined that action shall be taken to recover compensation previously paid to the Separated Employees pursuant to the Plans and the Company’s Compensation Recoupment Policy, based upon the final results of the Company’s restatement of its previously issued consolidated financial statements and financial information,” the press release stated.
As a result of turmoil within MiMedx, insurance companies have severed ties with the firm. According to the AJC, the U.S. Department of Veterans Affairs had considered firing five doctors who had connections to MiMedx, but those doctors chose instead to retire or resign.
This story is still developing.