Fintech Brex says a CEO hid a lawsuit during its acquisition talks

• Brex said in a new lawsuit that the board fired Pry Financials CEO Andy Su in August.
• The fintech startup, which bought Pry for $90 million, accused Su of concealing an ongoing lawsuit.
• Su filed her own wrongful termination lawsuit against Brex in California.

Fintech giant Brex has pushed out the co-founder of Pry Financials, a software startup it bought in April, accusing him of withholding material information during their deal talks this year.

In a lawsuit filed in Delaware Chancery Court, Brex said Pry Financial CEO Andy Su admitted to his lawyers in May, after the purchase closed, that he had concealed an ongoing contract lawsuit against him and Pry. Brex filed its complaint on August 30.

A Silicon Valley darling, Brex is currently valued at $12.3 billion. Co-founded by Pedro Franceschi and Henrique Dubugras, now co-CEOs of the company, Brex offers credit card, cash management and expense services for businesses. Their customers include startups like Carta, Thirty Madison and Room, as well as larger companies like DoorDash. In April, Brex acquired Y Combinator-backed Pry Financials for $90 million, according to TechCrunch.

Brex said in the complaint that it discovered the lawsuit shortly after acquiring Pry Financials, when it was added as a defendant in that dispute. The lawsuit in question was filed by a salesperson for another company that Su had founded — Su later estimated to Brex that the salesperson was seeking about $10 million in damages against the defendants, according to Brex’s complaint.

Brex said that when the lawyer asked Su about it, he agreed that he had withheld knowledge of the lawsuit before the deal closed.

“Mr. “Su took full responsibility for the situation caused by his behavior, saying it was ‘on me’ and acknowledging the ‘great loss of trust’ his behavior had caused,” Brex wrote in his complaint.

Su and his lawyer did not respond to Insider’s requests for comment. A representative for Brex also declined to comment.

The agreement for Brex to buy Pry Financials had encouraged Su to disclose any pending lawsuits involving him or his company, according to the complaint.

The Brex board met in July and determined that Su’s concealment of the lawsuit was grounds for terminating him under the merger agreement, according to Brex. After he was terminated by Brex on August 2, Su filed his own wrongful termination complaint in state court in San Francisco.

Brex has told the Delaware court that Su should not be allowed to pursue his claims as an employment action in California, arguing that the dispute is essentially about his alleged breach of their merger agreement, and therefore bound by the terms of the contract to be litigated in Delaware .

Pry Financials, a San Francisco-based software platform meant to help startups with their accounting and budgeting processes, raised nearly $6 million, including a $4.2 million seed round last year that drew investors including Y Combinator, Hyphen Capital, NOMO Ventures and Global Founders Capital , according to PitchBook.

Su, who studied computer science at the University of California, Berkeley, previously founded InDinero, another Y Combinator-based accounting software startup that has raised $14.4 million, according to PitchBook.