Middle-market lender Monroe Capital has terminated a managing director for allegedly stealing proprietary information and siphoning-off trade secrets to a new firm, Breakaway Capital.
Monroe Capital said the firm terminated former partner Warren Woo, effective last week, for violating the company’s policies and use of information systems.
A complaint filed on June 19 by Monroe Capital with the Circuit Court of Cook County, Ill., alleged that for more than 18 months, Woo forwarded hundreds of emails to another email at Breakaway Capital. He then deleted the forwarded emails from his sent-items folder at Monroe Capital to avoid detection.
Some of the emails instructed recipients to communicate with Woo in the future at Breakaway Capital only.
“Woo and his new company, acting in concert with his new partner and Breakaway Capital co-founder, Michael Connolly, arrogated to themselves critical business opportunities which belonged to Monroe Capital and which Woo had a clear duty to consider the exploit for Monroe Capital and not for his new company and new partners,” the complaint said.
Included in the 308 emails Woo forwarded, as well as 157 attachments, were new-business prospects, individual deal structures and pricing memos, internal underwriting analysis, and third-party analysis that Monroe Capital paid for as part of new-business pitches.
Monroe Capital uncovered the scheme after the firm received an SEC subpoena requesting information about Breakaway Capital. As a result of the subpoena, Monroe looked into Woo’s email.
“The investigation revealed that not only did Woo improperly transfer confidential and proprietary company and customer information and trade secrets, but that he actively intends to use this information to compete with Monroe Capital by taking deal source leads generated by Monroe Capital and made, or attempted to make, them his own for his benefit and that of Breakaway Capital.”
“Monroe Capital has suffered irreparable harm as a result of Woo’s unlawful conduct,” the complaint said.
Neither Warren Woo nor Michael Connolly returned calls or emails seeking comment. Woo and Connolly founded Breakaway Capital as a limited partnership.
Breakaway Capital, based in Los Angeles, is a private investment firm with $50 million of committed capital, seeking debt and structured equity investments in small and middle-market businesses across a variety of industries, the company’s website said. The company was formed in March 2014, the complaint said.
Chicago-based Monroe Capital, established in 2004, provides debt and equity co-investments to middle-market companies in North America, including unitranche financings, acquisition facilities, mezzanine debt and second-lien loans. – Abby Latour
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