Virgin Galactic Holdings Inc., a commercial spaceflight venture controlled by billionaire Richard Branson, is losing its chief legal officer as it fights a lawsuit over a merger with a special purpose acquisition company.
Michelle Kley will resign July 19, Virgin Galactic said in a securities filing. She joins Volta Inc., an operator of electric vehicle charging stations, as legal chief and corporate secretary on July 20, Volta said in a statement.
Kley’s departure comes as Virgin Galactic defends a lawsuit an investor filed last year over alleged accounting discrepancies related to the company’s 2019 merger with a SPAC called Social Capital Hedosophia Holdings Corp.
The lawsuit accused Branson of reaping a $300 million windfall by unloading Virgin Galactic shares at the peak of their value.
A Virgin Galactic spokeswoman confirmed that the company has begun its search for a new top lawyer.
Kley joins Volta along with William Cooper III, a capital markets and energy partner at Sidley Austin, who will serve as deputy general counsel and assistant corporate secretary for the company.
Volta spokeswoman Sabrina Strauss said both lawyers will work with the company’s interim general counsel Steven Schnitzer, who was appointed last month following the resignation of its former legal chief, James DeGraw.
Schnitzer will gradually turn over his duties to Kley and Cooper, Strauss said.
Volta went public last year by combining with a SPAC. In March, Volta saw two top executives resign after the San Francisco-based company postponed disclosing quarterly earnings.
Kley had joined Virgin Galactic in 2019 after serving as legal chief for Maxar Technologies Inc., a Westminster, Colo.-based space technology and satellite company.
She took over from Vanessa Chandler, who last year became the top lawyer for Vivino Inc., a startup wine marketplace that grew its valuation during the pandemic.
Kley received more than $1.6 million in total compensation from Virgin Galactic last year, including $1 million in stock awards and about $608,000 in cash, according to the company’s most recent proxy statement. The package grew from the roughly $511,400 that Kley received in 2020.
She also owns $1 million in Virgin Galactic stock, according to Bloomberg data. Securities filings show that Kley sold off $760,500 in company stock last year.
Virgin Galactic a year ago became the first company to take passengers, including Branson, to the edge of space on its SpaceShipTwo rocket plane called Unity. The trip came less than two weeks ahead of a similar voyage by rival Blue Origin LLC backed by Amazon.com Inc. billionaire Jeff Bezos.
Virgin Galactic’s SPAC tie-up with Social Capital Hedosophia had taken the space venture public. Branson has used SPACs to reshape his business empire, as roughly a quarter of his $5.7 billion fortune is invested in companies that listed through such vehicles in the last three years, Bloomberg News reported.
Virgin Orbit Holdings Inc., a satellite launch company in which Branson also owns a stake, went public last year in a SPAC deal backed by the Boeing Co.
Former Facebook Inc. executive Chamath Palihapitiya, a businessman known as the “SPAC King” who backed the Social Capital Hedosophia venture, sold off $213 million in Virgin Galactic shares last year, almost two months before the company amended its 2020 financial statement.
Palihapitiya, who stepped down in February as Virgin Galactic’s chairman, was sued in March by a Virgin Galactic shareholder claiming that he used his insider position to profit from the company’s artificially inflated stock price.
Latham & Watkins and Skadden, Arps, Slate, Meagher & Flom advised Virgin Galactic and Social Capital Hedosophia, respectively, on their 2019 combination.
The Virgin Galactic merger spurred similar transactions in the space industry, including at Momentus Inc., a space infrastructure company that last year hired former Department of Defense general counsel Paul Ney to be its top lawyer.
Momentus was sued last month by investors over its 2021 combination with a blank check company that helped take it public.
Virgin Galactic isn’t the only Branson-owned entity to recently change legal chiefs.
Thayer Thompson, a former top lawyer at Virgin Hotels who spent more than a decade working for Branson’s Virgin Group Holdings Ltd., left last year. Virgin Hotels hired former Sidley counsel Elizabeth Stone as its new general counsel in April.
Jeri Rouse Looney, a former senior legal director at Virgin Galactic, left the company last year to become general counsel for Skyryse Inc., an El Segundo, Calif.-based aviation technology startup.
In January, Virgin Galactic hired California lawyer Talina Cole to be its director of employee relations. Cole came aboard a year after Atlanta lawyer Aaron Futch joined the company, which has operations in Southern California and New Mexico, as a senior director for legal, commercial, and regulatory.
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