Key Takeaways:
RBCH Ltd., the largest outside shareholder of Brera Holdings PLC (Nasdaq: SLMT), filed a derivative lawsuit on June 22 in New York State Supreme Court accusing the board of self-dealing that caused tens of millions of dollars in harm to the company and its shareholders.
"The conflicted Board approved the sale and issuance of 2,298,000 Class B Ordinary Shares — approximately 21.4 percent of the post-issuance capitalization — to two of its own members," RBCH said in a statement, referring to CEO Ron Sade and director Keren Maimon. The shares were priced at $4.97 each, or about 34 percent of net asset value, giving the two insiders shares with an attributed NAV of roughly $29 million for just $11.4 million.
The May 21 registered direct offering was reserved exclusively for Sade and Maimon, with no underwriter and no fairness opinion, according to the complaint. Just five days after the RDO closed on May 27, the board rejected a non-binding all-stock offer from Forward Industries Inc. at $7.19 per share — a 30 percent premium to the RDO price. The board had also adopted a poison pill on April 24 that barred any other shareholder from crossing 9.99 percent ownership without board approval, effectively preventing outside investors from acquiring a comparable position on the open market.
The lawsuit details additional alleged self-dealing, including a strategic advisor agreement granting warrants representing 10.7 percent of the company's equity and recurring cash fees of 0.85 percent per annum of Solana assets under management for 10 years; an advisory services agreement paying $250,000 per month to an entity affiliated with the defendants for no documented deliverables; and a $200,000 signing bonus and $450,000 annual salary for Sade upon his appointment as CEO, plus an undisclosed equity grant. The complaint also alleges that three defendants sold shares above $33 each in September 2025, shortly after the $300 million PIPE closed, while all other PIPE investors remained under lock-up restrictions — a sale the lawsuit says appeared to breach the company's insider trading policy.
The board set the annual general meeting record date for June 1, just three business days after the RDO closed, allowing Sade and Maimon to vote their newly acquired shares at the June 26 AGM, the lawsuit alleges. The PIPE investors who funded the company with $300 million in September 2025 have been unable to sell their shares because the board failed to ensure timely filing of the company's annual report on Form 20-F, which was due April 30 but not filed until May 15, causing the PIPE registration statement to lapse.
Independent proxy advisor ISS recommended on June 16 that shareholders vote against all five Brera directors standing for re-election, citing a lack of board independence, absence of key governance committees, and a poison pill designed to entrench the board. ISS independently flagged a material weakness in internal controls over "the review, authorization and approval of equity and related party transactions."
The lawsuit seeks to enjoin Sade and Maimon from voting the RDO shares at the AGM and demands the board engage constructively with shareholders. The filing puts the company's governance under heightened scrutiny ahead of the June 26 meeting, where all five director seats are contested. RBCH has committed $50 million in the company and has seen the value of its investment decline 90 percent, making Solmate one of the worst-performing Solana delegated asset treasury funds in the market.
This article is for informational purposes only and does not constitute investment advice.
