MoviePass director quits, says management kept him in the dark
A MoviePass director has left the struggling company’s board, claiming that management kept him in the dark about crucial information and made it impossible to do his job.
Economist Carl Schramm cited “concerns about the corporate governance” at MoviePass in an Aug. 25 resignation letter sent to MoviePass parent company Helios and Matheson chairman Ted Farnsworth.
A “number of business decisions” were presented to the board of directors without enough time for them to examine documents, Schramm said in the letter, which was revealed by the company in a Thursday securities filing.
On numerous occasions, Schramm said he requested information about MoviePass’s financial status and operations, but never got a response.
“My ability to effectively discharge my duties as director has been compromised beyond repair,” Schramm said.
Schramm accused Helios management of executing “significant transactions either without board knowledge or approval, or in board meetings initiated with only a few hours of advance notice by email.”
Over the past month, MoviePass stopped working due to Helios running out of cash, which forced the company to take out a $5 million emergency loan. It has also changed MoviePass to a 3 movie-per-month service versus its original movie-a-day offering.
In an 8-K filed in response to Schramm’s letter, Helios said that it was “unaware of any unanswered requests for information.”
“The company firmly believes that it has kept the board fully informed and has provided all information needed for board members to exercise their responsibilities,” it said.
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