News Some Local Morning News: McGavick Sued Over $28 Million Golden Parachute
Emma Schwartzman, a great great granddaughter of a SAFECO founder, has filed a suit against GOP U.S. Senate candidate Mike McGavick claiming that his $28 million stock option and severance package “resulted from a fraudulent transaction between McGavick and the Board of Directors; breached defendants’ fiduciary duties to shareholders and constituted corporate waste; and violated federal securities laws by concealing the magnitude and extraordinary nature of the payout.”
(The Democrats have also denounced the deal, and have a complaint pending with the FEC arguing that the $28 million constitutes an illegal campaign contribution.)
McGavick says the lawsuit is politically motivated.
While McGavick’s rejoinder isn’t far fetched— Schwartzman’s attorney, Knoll Lowney, is well-known in environmental and lefty circles (he successfully challenged Tim Eyman’s property-tax measure I-747, and represented the Thornton Creek activists in Northgate)—McGavick’s line isn’t much of a defense. Poltically motivated or not, the issue remains: McGavick walked away from SAFECO with $28 million that he wasn’t originally entitled to. And a lot of people have legitimate questions about the deal. For instance, maybe the handsome severance package itself was politically motivated. Again, the Democrats argue that the money is an illegal campaign contribution.
Schwatrzman’s lawsuit may get to the bottom of it.