A group of original shareholders in the defunct Firefly Space Systems have accused co-founder and CEO Tom Markusic of fraudulently conspiring with Ukrainian billionaire Maxym Polyakov to force the rocket company into bankruptcy in 2017 and reconstitute it under a nearly identical name without giving them any stake in the new venture.
Markusic “betrayed the trust of his original co-founders and investors and committed fraud to cut them out of his aerospace company. Instead of managing the operations of the Original Firefly, a revolutionary rocket company with endless potential, Markusic schemed with…Maxym Polyakov…to rob Plaintiffs of their investments and form a new company called Firefly Aerospace, Inc. (the ‘New Firefly’),” the plaintiffs said in a lawsuit.
Do you make rocket engines? Do you need a place to test your rocket engines? Are you free on July 4?
If you can answer yes to all these questions, then get yourself down to the Burnet County Courthouse in Texas next month. The last vestige of bankrupt Firefly Space Systems — its test facility north of Austin — will be auctioned off beginning at 10 a.m. on July 4.
The company had been developing a small satellite launch vehicle before it suspended operations in September due to financial difficulties.
Virgin Galactic had launched litigation against Firefly co-founder Thomas Markusic, who had previously led Virgin’s effort to develop a competing launcher. Virgin claims that Markusic took intellectual property when he left the company in 2014.
This is an interesting Tweet from Firefly Space Systems’ co-founder Michael A. Blum on Wednesday to Virgin Galactic CEO George Whitesides with a cc: to Whitesides’ boss, Richard Branson. Claude appears to be Claude M. Stern, one of Virgin Galactic’s lawyers.
Letters of Intent valued at over $300M exceed projected launch capacity through 2021
CEDAR PARK, Texas, November 14, 2016 (Firefly Space Systems PR) — Firefly Space Systems, the Texas-based developer of dedicated launch vehicles for the small satellite market, announced today it has received letters of intent (LOI) in excess of projected launch capacity through 2021.
“The support from established and newspace satellite manufacturers following our recent announcement of financial difficulties has been tremendous. These LOI’s demonstrate the market demand for the small satellite launch product that Firefly is developing,” said Firefly co-Founder and CEO Dr. Thomas Markusic.
Earlier this month, Virgin Galactic filed suit in Los Angeles Superior Court against Firefly Systems and two of its officers, Michael Blum and P.J. King, alleging misappropriation of trade secrets and unfair competition.
The lawsuit is related to arbitration between Virgin Galactic and the company’s former vice president of propulsion, Thomas Markusic. Virgin alleges Markusic took trade secrets and confidential information with him when he left his position at the end of 2013 to co-found Firefly with Blum and King.
The lawsuit alleges that Firefly, Blum and King benefited from knowledge that Markusic took with him from Virgin Galactic. Markusic and the defendants have denied the claims.
Firefly laid off all of its employees at the end of September, saying the company had run out of money after an investor pulled out.
Firefly was developing a small satellite launcher, Firefly Alpha, that would have competed for business with the LauncherOne booster that Virgin Galactic is developing.
Update: I have heard everyone was laid off at Firefly. In addition, there are reports there was an arbitrator’s ruling earlier this month in the case brought by Virgin Galactic against its former head of propulsion, Tom Markusic, who co-founded Firefly. The ruling was that Markusic had taken proprietary information when he left Virgin Galactic. This is the type of ruling that dries up funding sources for startups, which would explain the company’s financial setback.
There’s been a statement posted by Firefly Space Systems via Twitter.
“Firefly Space Systems in recent weeks experienced a setback on funding, which us to take necessary action to maintain cash-flow equilibrium and position our company for future success. We are reviewing options with our financial partners and will be communicating updates to our employees in as close to real time as possible. We will update the media as soon as a resolution is reached.”
I had heard reports of layoffs in August of about 30 people, although a source said the number was less than that total.
Video Caption: Soul of the Machine tells the stories of designers and engineers that work to bring products with global impact to life. Episode 2 features Tom Markusic, CEO of Firefly Space Systems and one of the world’s leading propulsion engineers, who has set out to revolutionize the way we get to space. He and his team are rapidly working toward their first launch of NASA satellites set for March of 2018.
The Small Satellite 2016 Conference got underway today in Logan, Utah. Although I was not able to make it, I’ve been able to follow the conference via Twitter. A number of small satellite launch companies provided updates on launch vehicles they are developing. There is information below on Firefly Space Systems, Nammo, Rocket Crafters, Rocket Lab, Super Strypi, Vector Space Systems and Virgin Galactic.
Information came from the following Tweeters who are attending the conference:
Space News reports the British government has awarded contracts totaling approximately $2 million to five groups for feasibility studies on launching out of the United Kingdom.
Airbus Safran Launchers, the prime contractor for Europe’s Ariane 5 and future Ariane 6 rockets, which has said was interested in a small-satellite launcher in addition to commercializing its work on a suborbital space-tourism vehicle.
Deimos Space UK associated with Firefly Space Systems of the United States, developing a vertical-launch rocket.
Lockheed Martin of the United States, proposing a version of its Athena small-satellite vertical-launch vehicle.
Britain’s Orbital Access associated with BAE Systems and Reaction Engines Ltd., proposing to use a modified version of Reaction Engines’ single-stage-to-orbit technology, whose development is being partially funded by the British government.
Virgin Galactic, which is proposing its SpaceShipTwo suborbital vehicle, designed in the United States.
Washington D.C. (CSF PR) – The Commercial Spaceflight Federation is excited to announce the addition of three new associate members: Calspan Corporation, Firefly Space Systems, and TIP Technologies.
“The commercial spaceflight industry is developing and innovating at an ever-increasing pace,” said CSF president Eric Stallmer. “With the recent expansion of membership we have brought on board three different companies focusing on areas ranging from systems testing, small satellite launches, to quality assurance software. This diversity is a testament to the vast reach and influence of the rapidly growing commercial space sector.”
Orbital ATK is facing a lawsuit from its former partner in the ViviSat satellite servicing venture, claiming Orbital improperly shut down the joint venture to pursue the servicing business on its own.
In a suit filed April 29 with the Supreme Court of the State of New York, U.S. Space LLC alleges that Orbital ATK violated the terms of a management agreement regarding operations of ViviSat to take control of the company and dissolve it in April, a maneuver U.S. Space called in court filings “a double-cross of cosmic proportions.” The lawsuit was first reported by the legal publication Law360.
U.S. Space and ATK Space Systems created ViviSat in 2010 to develop and commercialize a satellite servicing system later known as the Mission Extension Vehicle (MEV). Under the original teaming agreement, ATK was primarily responsible for technical development of the MEV, while U.S. Space was responsible for financing and business development.
ATK supplied about $3 million through March 2013 to fund ViviSat’s operations, according to court papers. However, when ViviSat said in late 2012 that it needed an additional $200,000, ATK requested an amendment to the management agreement that would tie the funding to business development milestones.
The revised agreement, signed in April 2013, included an “amendment trigger” that would effectively give control of ViviSat to ATK, including three of four seats on its board of directors, if ViviSat didn’t achieve those milestones. That agreement also allowed the ViviSat board to dissolve the company by a majority vote.
The dispute involves whether VivaSat met the milestones in time. Orbital ATK says the suit is without merit.
Editor’s Note: This is a fine story that digs into the details of the lawsuit. My only question is: where has SpaceNews been for the last six months since the Virgin Galactic-Firefly litigation became public?
It’s a helluva story involving some rather explosive claims by two major NewSpace companies. Firefly would be effectively put out of business by a rival if Virgin wins. The lawsuit certainly qualifies as news every bit as much as the VivaSat lawsuit. Yet, it hasn’t merited a single story by the leading space news website. It’s disappointing.
Virgin Galactic’s former vice president of propulsion, Thomas Markusic, has accused Richard Branson’s space company of lying about the safety and performance of its SpaceShipTwo suborbital tourism vehicle.
“Dr. Markusic was forced to separate from VG [Virgin Galactic] because the company was defrauding the public about the ability of the vehicles to reach space and was utilizing rocket engine technologies that have a high probability of causing catastrophic failure and loss of life,” according to the document.
In Virgin Galactic’s arbitration procedure against its former Vice President of Propulsion, Tom Markusic, Sir Richard Brnason’s space tourism company has sought a broad range of documents in its effort to prove that Markusic violated his employment contract and took proprietary information in setting up a rival company, Firefly Space Systems.
Earlier this week, Firefly co-fouder and board member P.J. King filed suit in Los Angeles seeking to set aside a subpoena signed by arbitrator Louise LaMothe seeking documents from him. Virgin also has requested documents from Firefly and director Michael Blum.
The information below shows the documents requested in the subpoenas served to King, Firefly and Blum. The materials include employment contracts, organizational charts, specifications for engines and launch vehicles, development schedules, financial statements and other documents.