Start-up CEO Takes PNY to Trial Over Soured Deal

October 17, 2014

​Fenwick & West partner and chair of the litigation group, Rodger Cole, was quoted by The Recorder in an article about a Silicon Valley trial court case that demonstrates what can go wrong when two technology companies "divorce."

The dispute in question involves the 2011 acquisition of Silicon Valley Solutions (SVS), a Bay Area start-up specializing in customized memory drives, by PNY Technologies, a New Jersey-based multinational hardware manufacturer. In that "acqui-hire," PNY took on SVS's CEO, Lorenzo Salhi, and a few of his employees. Six months following the deal, however, Salhi was fired. Salhi and PNY then each alleged misrepresentation, and the parties sued for fraud and breach of contract, among other things.

The Recorder asked Cole for his perspective as Salhi’s case, Salhi, et al. v. PNY Technologies, Inc., was about to go to trial in San Mateo County Superior Court.

Cole said that, in his experience, only about one in 20 such cases ever go to trial, and when they do, it is usually because intense feelings abound. In such circumstances, Cole suggested, the best strategy for each of the battling CEOs would be to keep their emotions in check in court.

"It's a difficult line to draw, because you do want empathy with the jury," he said, "but you don't want anger, for example, to come through in testimony."

The full article is available through The Recorder's website (subscription required).