Addressing The False Allegations Head On
In November of 2023 an article was published in the Central Penn Business Journal (CPBJ) covering a lawsuit that was filed against GenHydro, Eric Schraud, Matthew Schraud and Chris Kager. The suit was primarily perpetrated by Patrick Daly, an investor in GenHydro and someone who GenHydro had hoped to have a lasting and beneficial partnership. Daly filed the suit in response to a stock sale by Matthew Schraud in which Daly made accusations of securities law violations. The fact is, three different highly qualified law firms were hired to review these claims – at GenHydro’s expense – and all three firms came to the same conclusion: Patrick Daly’s accusations were not just incorrect, they were incoherent. No securities laws had been violated, and GenHydro continues to stand by that assessment.
Given Daly’s status as an investor, it was decided that the stock sales would be reversed. This was purely an attempt to repair the relationship with Daly. Daly chose to pursue a lawsuit regardless of these steps by GenHydro and continued to make accusations that he had time and again been shown as untrue. Not only so, but Daly also fabricated a claim that Eric Schraud, CEO of GenHydro, had sought to unjustly profit from GenHydro’s patented technology. Daly never provided any evidence for his claims, but he asserted them in his complaint filed with the Lancaster court anyway.
Even after months of turning over no evidence to support his accusations, Daly, instead of complying with the court ordered mediation and arbitration process, continued a witch hunt of seeking additional documents from GenHydro, and filed another suit in the Delaware courts to compel further disclosures. After filing this suit, Daly went to Central Penn Business Journal and weaponized their publication through the promotion of what amounts to a clear-cut case of slander and public defamation. Daly’s express intent was to deter investors away from GenHydro.
Regarding CPBJ’s role. It is unfortunate that they did not do a basic investigation into the allegations before publishing their article, especially given the seriousness of the accusations and the obvious damage to GenHydro and the named individuals that would ensue. For example, CPBJ seemed to assert access to the relevant court documents. However, they published a claim regarding Matthew Schraud’s and Chris Kager’s ownership in GenHydro changing because of the stock sale in question. If they had reviewed the companies cap table, which was included in the court documents, they would have seen that the changes in ownership were completely unrelated to any stock sales and were in fact a combination of corrections to Matthew Schraud’s ownership, and vesting shares to Chris Kager as part of his work for GenHydro. As the cap table clearly showed, no stock sale between Matthew Schraud and Chris Kager had ever occurred. This was explained to Patrick Daly’s attorneys long before the publication of this article, and yet Daly and CPBJ published these facts as support for Daly’s allegations.
Regarding GenHydro’s patents. Daly’s claims were not only incorrect, but they were completely baffling. Eric Schraud did not and has not sought to sell the intellectual property at the core of GenHydro’s technology, nor any parallel patents that have been filed which support the core technology. To date, Eric Schraud has not profited from GenHydro’s patents outside of his compensation as a salaried employee.
In a further attempt to rid the company of these accusations and get back to the work of commercializing a novel renewable energy technology, a settlement agreement was drawn up, reviewed, edited and agreed upon by all parties involved, with Daly himself making significant contributions to the agreement. As part of that agreement was a joint statement meant to be a step towards undoing the damage done to GenHydro’s reputation by the slander published in the CPBJ article. Daly assisted with the wording and ultimately agreed as part of the settlement to jointly publish this statement. Daly has since multiple times refused to publish this statement. Instead, he attempted to find mismanagement in GenHydro through continued requests for documents, all of which have been supplied, and Daly has yet to uncover any wrongdoing on the part of Eric Schraud or any others employed at GenHydro.
As far as GenHydro is concerned, Daly and the other plaintiffs (Tyreflow Environmental and Michael Cooney) have failed to comply with the settlement agreement and continue to do so. Eric Schraud and GenHydro have complied with all requests made by Daly in the settlement agreement and all requests made after the settlement agreement. Not only so, but Eric Schraud opened all document requests to be visible by all GenHydro investors so that the facts can be seen by any investor interested in checking for themselves.
As a result of the public defamation published in Central Penn Business Journal, GenHydro has had considerable difficulty finding investors to keep up the work of commercializing groundbreaking technology. In May of this year, GenHydro’s employees were furloughed. This included engineering and operations employees that have been vital to GenHydro’s prior success. GenHydro’s engineers were among the best and the brightest, and even when funding was in question, they continued to work diligently because they believed in what they were doing.
After being furloughed, these employees did file wage complaints with the department of labor, which CEO, Eric Schraud, fully supports. These individuals deserve to be compensated for the incredible work they did at GenHydro, and while they chose to stay for several months with significantly reduced payroll, GenHydro does not dispute that they deserve their full compensation.
Despite the damage done to GenHydro, and the loss of employment for GenHydro’s incredibly talented team, Daly and those who joined him in his original suit have continued to refuse to comply with the settlement agreement and to allow GenHydro to get back to its mission.
GenHydro and CEO Eric Schraud are still committed to this technology, and are continually working to get the company back on track to fulfilling its mission of bringing a promising renewable energy technology to a world that desperately needs solutions.
