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SonicBlue CEO Ousted After Demanding Repayment of Corporate Loans Made to Directors

In a really interesting article, The San Jose Mercury News reports that SonicBlue CEO Kenneth Potashner was ousted yesterday after he demanded that members of the company's board of directors repay $500 thousand in loans that are due in 2003. According to the article:

Potashner said he began to scrutinize about $177,000 in loans that ... board members... received in June 2000 to purchase stock in RioPort, a digital music services company that is 32 percent owned by SonicBlue.

Potashner, who also received a $261,232 loan in December 1999 to purchase RioPort stock, said the board members voted last December to make their loans "non-recourse," an accounting term that meant the directors would not be personally liable if they failed to pay.... Potashner, in contrast, is personally liable for his loan.

There's probably a lot more to this story than has been written in this article, but, Potashner is certainly trying to appear to take the high road by invoking the rights of the shareholder.

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