Kristy Carr sues Bubs after sacking, citing breach of Fair Work rules
Goat milk-focused infant formula company Bubs has been hit with a lawsuit after it let go its chief executive and co-founder Kristy Carr last month.
Bubs founder Kristy Carr is suing the company after she was sacked as its chief executive last month.
Ms Carr has filed a statement of claim in the Federal Court, alleging that the company has breached Fair Work rules. It is the latest instalment in Bubs’s woes – the share price of which has dived almost 70 per cent in the past six year.
A Bubs spokesman said the lawsuit will be “vigorously defended”. On the court filing, Ms Carr has cited a breach of general protections.
Such breaches include protections relating to workplace rights, engaging in industrial activities, discrimination and “sham arrangements”, according to the Fair Work Commission.
But the exact nature of Ms Carr’s allegations are yet to be disclosed after the Federal Court rejected The Australian’s request to access her statement of claim.
Under new rules introduced earlier this year, the public can’t see these documents until there’s a first hearing in the case. This usually takes weeks, and if the parties manage to settle their differences in the meantime may never happen at all.
The Fair Work Commission says: “Certain persons, including employers, principals, employees and industrial associations; are prohibited from taking adverse action against certain other persons because the other person has, or exercises, a workplace right, or engages in industrial activity.”
“Adverse action includes dismissal of an employee, but also includes a range of other action such as prejudicing an employee or independent contractor and organising industrial action against another person. Coercion and misrepresentation in relation to workplace rights and industrial activities are also prohibited.”
The first hearing in Ms Carr’s lawsuit was held before Justice Michael Wheelahan on Tuesday, who ordered that a case management hearing be held on August 25.
Ms Carr is leading a group of dissident investors – including Chemist Warehouse chairman and co-founder Jack Gance – who are pushing for a spill of Bubs’ board, led by Katrina Rathie.
Last month, Ms Carr wrote on LinkedIn that “there will always be bullies who try to bring you down”, without naming those bullies.
“Even if they (bullies) win, they do not define who you are and cannot take away what you have achieved,” Ms Carr wrote.
On Tuesday, Ms Carr wrote another post announcing she and Bubs’s former executive chairman Dennis Lin were launching TAKE Global, “a boutique strategic advisory and product management firm”.
“When one door closes, another door opens … I’m very excited to partner with Dennis Lin (once again!),” Ms Carr wrote.
“Together, we have over 50 years of experience in business across executive, contract negotiations, mergers and acquisitions and financial markets in Australia, China and the USA. We’re already enjoying working with our first clients who are looking to rapidly expand their businesses with new capital partners.”
Ms Carr says she wishes to remain a supporter of Bubs but has ruled out a return to its executive or board. Instead, she is advocating for former A2 Milk’s Asia Pacific boss Peter Nathan to be Bubs’ next chief executive. Mr Nathan has been actively engaging with the investment community, saying he believes Bubs can “prosper”.
It comes amid a collapse of Bubs’ China revenue, which dived 57 per cent to $2.6m in the three months to March 31 versus the previous corresponding period. Bubs is now forecasting full year China revenue of $13.5-$13.8m compared with last year’s $53.6m.
Last Friday, the company attributed the plunge to an exclusive Chinese distribution agreement it signed with AZ Global, which has struggled to sell products. “Significant amounts of finished goods inventory (are) still held in trade, predominantly Bubs Supreme,” Bubs said in a statement to the ASX.
It is understood AZ Global subsidiaries Willis Trading and Alice Trading owe Bubs about $5.7m. Bubs efforts to get the debt repaid have so far been unsuccessful. When she was chief executive, Ms Carr wrote a letter to Willis and Alice, requesting that there be no outstanding balances by the end of this month, when the exclusive distribution agreement expires.
AZ Global, which is also an investor of Bubs, has now joined Ms Carr’s push to spill the board.
