Plooto co-founder sues payment software firm, accuses board of ousting him

Plooto co-founder Serguei Kloubkov has launched a lawsuit against the Toronto payments scaleup and its board, including CEO John McLane, for allegedly breaching a shareholder agreement.

The lawsuit alleges that a unanimous shareholder agreement (USA) struck as part of Plooto’s 2022 Series B round should have allowed Kloubkov to re-integrate his fellow co-founder, Hamed Abbasi, to the board of directors following his acquittal in a sexual assault case earlier this year. Instead, court filings allege Abbasi was elected, then promptly removed, from the board in August against Kloubkov’s wishes. These accusations have not yet been proved in court.

Kloubkov alleges he was pulled from his CTO position in “clear retaliation” for his attempt to return his fellow co-founder to the company.

Founded in 2015 by Abbasi and Kloubkov, Plooto’s software helps small and medium-sized businesses (SMBs) automate their accounts payable and accounts receivable operations and integrates with accounting systems like QuickBooks, Xero, and NetSuite to eliminate manual data entry and automate bill and invoice reconciliation. As of October 2024, Plooto served more than 10,000 customers and had 120 employees in Canada and the United States.

Kloubkov alleges that, a few weeks after Abbasi’s election and removal, he was pulled from his CTO position “without cause” and in “clear retaliation” for his attempt to return his fellow co-founder to the company. He alleges that Plooto also pursued an acquisition explicitly meant to dilute Kloubkov’s stake in the company. The allegations have also not been proven in court.

The lawsuit is seeking a declaration that Plooto and its directors conducted business in a way that unfairly disregarded Kloubkov’s interests as a shareholder, and that Abbasi’s removal breached the USA. It seeks an order voiding the shareholder vote that removed Abbasi, and Abbasi’s reinstatement as director. Alternatively, Kloubkov would seek an order for Plooto to buy out his stake in the company and cover his court costs.

Kloubkov filed the lawsuit in a Toronto court on Nov. 10 and publicly announced the proceedings in a LinkedIn post approximately one week later. BetaKit has reached out to Kloubkov, McLane, and Plooto for comment.

“Although it saddens me deeply and despite my genuine efforts to resolve these matters amicably, the Board has left me with no choice but to seek relief through legal means,” Kloubkov wrote in his LinkedIn post, which didn’t mention that the lawsuit is based on reinstating Abbasi to the board.

Abbasi responded to the post with a comment, writing, “I admire your courage in taking on this uphill battle.”

Kloubkov claims termination was “bad faith” retaliation

Abbasi resigned from the CEO job in March 2024 after he was charged with sexual assault, for which he was acquitted earlier this year. The company told BetaKit in October 2024, upon announcing McLane as CEO, that Abbasi had stepped down “for personal reasons.”

According to the lawsuit, Kloubkov and Abbasi were entitled to designate up to two directors for election to Plooto’s board under the USA. When Abbasi resigned, Kloubkov “fully expected” him to return as a director if he were acquitted of the criminal charges.

Instead, when Kloubkov nominated Abbasi to fill the vacant board seat this past May, Plooto allegedly notified shareholders that a meeting would be held to elect Abbasi with plans to immediately remove Abbasi as a director following his election.

The shareholder notification did not properly inform voters of Kloubkov and Abbasi’s rights under the USA, according to the lawsuit. It supposedly required Kloubkov to “affirmatively approve” Abbasi’s removal. When Abbasi asked chairman Albert Wahbe to adjourn the meeting for shareholders to appraise themselves of potential USA breaches, Wahbe purportedly declined.

Kloubkov’s lawsuit alleges he was terminated from his role as CTO without cause one week later, even though he had received no indication that he was not succeeding in his role. The company had actually increased Kloubkov’s compensation package just four months earlier to recognize his performance. The filing did not mention the size of the increase. Plooto allegedly presented Kloubkov’s departure to its employees as a mutual decision, but the lawsuit claims “this was not the case.”

“This termination was in bad faith and retaliation for Mr. Kloubkov’s efforts to exercise his rights under the USA,” according to the lawsuit.

Additionally, Kloubkov is alleging that Plooto began considering the acquisition of United Arab Emirates-based corporate card and expense management software Pluto Technologies Limited on Oct. 27 to dilute his stake in the company. While Plooto had previously decided against acquiring Pluto, McLane allegedly told Kloubkov that, as part of the revived acquisition plan, Plooto intended to issue the same class of common voting shares that Kloubkov holds.

The issuance would deny Kloubkov the majority of the votes attached to the outstanding common shares, stripping him of his director election rights under the USA. Kloubkov alleges that Plooto has never used voting common shares to acquire any other asset, and that the acquisition is inconsistent with Plooto’s corporate strategy of conserving cash.

“In short, there is no valid business purpose to this transaction,” the filing reads. “The purpose of the acquisition of Pluto is to marginalize Mr. Kloubkov.”

Kloubkov has appointed Stockwoods LLP as his legal counsel.

Feature image courtesy Plooto on LinkedIn.