Sandi Adler, former vice president at Starboard, claims she was fired for objecting CEO Andrew Levy\’s plans to subsequently \”defraud the United States and the Small Business Association.\”
The CEO of a major Wendy\’s franchisee used funds that were meant to keep workers employed during COVID-19, to instead fund a newly purchased home, as stated in a lawsuit from Adler, a former vice president at the company.
Sandi Adler, the Starboard Group\’s former vice president of legal affairs and human resources, on June 30, 2020, filed a lawsuit against CEO Andrew Levy and officer Kevin Holbrook as well as Starboard. Starboard, a major Wendy\’s franchisee based in Florida runs 101 locations of the fast-food chain in seven states, as stated on the company\’s website.
According to Adler\’s lawsuit, Starboard received approxiamately $9 million in Paycheck Protection Program (PPP) loans. Consequently, Government records reveal that numerous Starboard entities that are based in Branson, Montana and Coral Springs and Florida have received loans in the range of $150,000 to $2 million.
CEO Levy allegedly diverted appromimately $1 million in funds to finance a newly purchased house in Montana, according to the Adler’s complaint. (Business Insider confirmed that a company created by Levy and Heather Levy currently owns several parcels of land in Livingston, Montana.)
\”Levy directed Adler to place certain personal employees in Montana as corporate employees,\” the complaint adds. \”The effect of this, in view of the PPP funding, was to defraud the United States and the Small Business Association.\”
Adler also states in the complaint that Levy instructed her to convey to creditors, landlords, vendors and suppliers that the company is yet to receive PPP funding and therefore cannot meet its financial obligations. Upon complaining about Levy\’s orders to Holbrook, Adler’s superior at the company, she claims he fired her.
The complaint moreover alleges that Holbrook sexually harassed Adler, including incidents like saying he liked big breasts, describing oral sex, and pressing her to go on vacation with him to Europe. Adler told Levy in late fall she objected to Holbrook\’s advances, according to the lawsuit. Later she claims Levy responded with \”Why don\’t you guys just f— already and get it over with?\”
Wendy\’s chose to not immediately respond to Business Insider\’s request for comment. Starboard clarified in a statement that Adler\’s allegations according to him were \”false and hurtful,\” and the decision to terminate Adler \”was not made in haste or without reason.\”
He further added, \”With regard to our handling of PPP dollars, our financial records are clear and complete and will refute any claim of misuse.\”
\”More troubling, however, is the accusation of sexual harassment. Despite an initial desire to simply view this as being the words of a disgruntled former employee, we must take all accusations of this nature seriously and, as such and in accordance with our corporate policy, have launched an independent, internal investigation. In order to protect the privacy of those involved and to preserve all legal recourse at our disposal moving forward, we will have no further public comment on this issue at this time.\”
The SBA, later this week released information about companies that received $150,000 or more in PPP loans. Various franchisees applied for loans, along with a few major chains such as P.F. Chang\’s and TGI Friday\’s.
When the first round of funds ran out in April, chains such as Shake Shack and Sweetgreen returned PPP loans after facing backlash. Nevertheless, with approximately $134 billion left in unused loans, neither P.F. Chang\’s nor TGI Friday\’s have hinted at prematurely returning the funds.