Blair Miller

(Daily Montanan) Tim Sheehy and his aerial firefighting and surveillance company’s former parent company have been accused of breach of contract by allegedly forcing two former employees to sell off stock that was part of their compensation package before the company sold a subsidiary for hundreds of millions of dollars and then took Bridger Aerospace public in 2023.

A spokesperson for Sheehy and his brother said they strongly deny the allegations.

The allegations are contained in a lawsuit filed in April in Gallatin County District Court against Sheehy and his brother Matthew, as well as Bridger Management Holdings, the former parent company to Bridger Aerospace and the Sheehys’ drone company, Ascent Vision Technologies.

The lawsuit was filed by Bozeman attorneys John Amsden and Conner Bottomly on behalf of Weston Irr, the now-former director of unmanned aircraft systems for Bridger Aerospace, and John Wantulok, a former project engineer for the drone company.

The attorneys for the two men claim that Bridger and the Sheehy brothers improperly forced them to sell or convert their vested stock ownership in the company — which the suit claims could be worth millions of dollars — failed to distribute proceeds from the sale of the drone company or from the public offering, and did not provide them with accounting or ownership records. The lawsuit does not detail the number of shares the men held, and it asks the court to help them figure out the value they believe they are owed.

Tim Sheehy is the frontrunner in the Republican primary to face Democratic U.S. Sen. Jon Tester in November after being handpicked by Montana’s other U.S. Sen. Steve Daines and the National Republican Senatorial Committee to challenge the three-term incumbent.

The attorneys behind the lawsuit are asking a judge to order an accounting of Bridger Management to determine Irr’s and Wantulok’s interests. The lawsuit claims that if the plaintiffs can force the company to turn over its accounting, it will show “that the Sheehy Defendants created Bridger Management with the intention of perpetrating wrongful conduct upon the minority owners such as Plaintiffs.”

The plaintiffs’ attorneys are also asking for damages incurred; recovery of lost distributions; and for their ownership interest to be paid out “as a result of defendants’ wrongful conduct and breaches of fiduciary duty.”

On behalf of the plaintiffs, Amsden said in response to multiple requests to discuss the case further this week that it would be inappropriate to comment on pending litigation. He said the timing of the suit had nothing to do with Sheehy’s political race.

A spokesperson for the family said the Sheehys will fight the allegations.

“We believe the complaint is frivolous and riddled with legal and factual inaccuracies,” the spokesperson said in a written statement. “We look forward to strenuously defending the allegations in court.”

An attorney for Bridger Management, which was dissolved after Bridger Aerospace went public last year, did not respond to a request for comment by publication time Friday.

The Montana Independent, which is a media outlet launched this year by the progressive media organization American Independent Foundation in several battleground states, as the Montana Free Press reportedfirst published details regarding the lawsuit on Thursday.

Suit says employees forced to sell stock before subsidiary sold off

Wantulok started working with Bridger in 2015 as an unpaid intern while finishing his degree at Montana State University and was hired on in a salaried position with Ascent Vision after graduating, eventually moving over to a position at Bridger Aerospace, according to the lawsuit and news articles. Irr started at Ascent Vision Technologies in 2017 and also moved over to Bridger Aerospace.

The lawsuit says Tim and Matthew Sheehy had told both men their salaries were “insufficient compensation” for the work they were doing and had them accept reduced salaries in exchange for ownership interests in the parent company at the time, Bridger Management.

It says since Wantulok and Irr accepted the ownership interests, providing them Class C stocks, they had to work extra hours and on weekends and holidays, unlike other employees who did not own stock.

The lawsuit claims that the Sheehys told both men not to discuss their ownership shares with other employees or they would lose them and their jobs.

The suit says the two men signed written contracts in 2017 that defined those Class C shares as their personal property, and that the shares gave them ownership interest in all three companies that existed at the time.

The Sheehy brothers each owned half of the company’s Class A shares, which included voting powers, according to the suit. Class C shares are typically provided to employees or other public investors but typically do not carry voting powers. The suit says Wantulok and Irr were “assured” their shares would be transferred even if their jobs were transferred across companies.

But the lawsuit claims the two men were given murky information about the agreement and their shares despite the Sheehys and company repeatedly telling them “that their ownership interests were increasing, that the interests were ‘worth millions,’ and that the plaintiffs would be ‘taken care of.’”

However, the suit claims that when their ownership interests vested, Wantulok and Irr were told Bridger Management would be selling Ascent Vision and they “would be required to sell their ownership interests in Bridger Management prior to the sale.” It claims they were not given any legal or contractual basis for the forced sale, nor a valuation of the shares they held.

The suit says Irr called Tim Sheehy and asked for more information on why he would have to sell his stock, the basis for the valuation, and how much ownership he had, but was not given any of the information.

“Instead, defendants suggested that Irr’s ownership interest had not vested and could be revoked, and told Irr that he was fortunate to be receiving any compensation for his ownership interests,” the lawsuit says.

It says that afterward, the company did increase the amount Irr would be paid for his shares but did not provide any legal basis for the sale or the valuation.

It says the Sheehy brothers “personally acquired all of plaintiffs’ and other’s ownership interests in Bridger Management” and shortly afterward sold Ascent Vision, which was an aerial drone intelligence, surveillance and reconnaissance company that had a government contract to provide anti-drone technology for the military.

The Montana High Tech Business Alliance wrote in September 2020 that Ascent Vision Technologies was sold to CACI International the month before for $350 million and that Tim Sheehy would continue as CEO.

“A lot of local lives were changed here. Every single person on staff got a check because we were an employee-owned company,” Sheehy was quoted as saying at the time. “Not only has a lot of wealth been created in Montana, it’s almost all staying here locally in the community.”

Bridger Management merged Bridger Aerospace with another company and took it public in January 2023 and, according to the lawsuit, dissolved Bridger Management in June last year. The initial merger valuation was $869 million, according to press releases from when the merger was announced in August 2022.

Plaintiffs ask for accounting of Bridger to determine fair compensation

The lawsuit says Wantulok and Irr were never provided notice of the company’s dissolution in accordance with Montana law, and don’t have the necessary information to determine if there was a legal basis for the forced sale of their shares and whether they were fairly compensated.

The plaintiffs are seeking an accounting of Bridger Management “to determine their share of profits and distributions wrongfully withheld, and to enable an adequate valuation.” They also want a judge to find that Tim and Matthew Sheehy, along with their former company, breached the operating agreement by forcing them to sell stocks, failing to make distributions and not providing information about their ownership interests.

The suit also claims Tim and Matthew Sheehy breached their fiduciary duties to Wantulok and Irr in order to “maximize their own financial gain at the expense of minority owners.” The suit includes a claim of shareholder oppression, asks for declaratory judgment to give the plaintiffs the company records they want, and for the stock distributions the two men say they wrongfully lost because they were forced to sell their shares.

“On information and belief, the Sheehy Defendants caused Bridger Management to force Plaintiffs to sell their ownership interests and make distributions to Sheehy Defendants at the exclusion of minority owners like Plaintiffs,” the suit says. “The corporate veil of Bridger Management should therefore be pierced to enable an accounting of all related entities and to the Sheehy Defendants and all affiliated Defendant entities liable for Plaintiffs’ damages resulting from Defendants’ wrongful conduct.”

Company calls financial scrutiny ‘politically motivated attacks’

As a political newcomer who has leaned heavily on his status as a veteran and successful Montana small business owner, the lawsuit and public filings with the U.S. Securities and Exchange Commission have provided more insight into how Sheehy built his business into one that employs around 150 people and brought in $67 million in revenue last year, though it also reported a $77 million net loss and concerns about being able to make certain debt payments this year.

Sheehy has criticized news outlets that have reported on the company’s finances in recent months and said they were harming employees and shareholders of the company.

Bridger Aerospace issued about 2.1 million shares of stock mid-April to raise more than $9 million, and on the first-quarter investor call earlier this month, Sheehy said the company saw its highest-ever first-quarter revenue in company history, at $5.5 million, due in part to being able to deploy some of its firefighting aircraft to Oklahoma and Texas in February and more in April.

The company reported $6.8 million in unrestricted cash and investments at the end of the quarter and believes it will generate adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $35 million to $51 million this year – the same it projected in November and March.

On Monday, the company issued a press release alleging reporting on the company’s finances constituted “politically motivated attacks on its business.”

“In recent weeks, candidates for political office and their allied political organizations have written disparaging articles and launched partisan attacks against the company. They have assembled a mosaic of publicly available information, out of context corporate statements and negative legal risk factors and disclaimers to weave together an unflattering narrative in media reports regarding the financial health of Bridger,” the press release said.

“Every full-time employee of Bridger is granted equity and is a stockholder of the Company,” it went on to say. “This is a core leadership philosophy of the Company’s Board of Directors and executive team to ensure that all team members participate in the success of the Company.”