Craig Bouchard 11-05-19

Braidy Industries founder Craig Bouchard, interviewed by WDRB in his Ashland, Ky. office on Nov. 5, 2019.

LOUISVILLE, Ky. (WDRB) – Braidy Industries has agreed to pay its founder and former CEO Craig Bouchard $6 million to walk away even as the company warns investors in a new regulatory filing that it could run out of money in the next year if it can’t raise funding to build a long-promised $1.7 billion aluminum plant near Ashland, Ky.

And the company’s new “principal executive officer” hired in April is Terry Gill, who oversaw Kentucky’s investment of $15 million of taxpayer money into Braidy Industries in 2017 as economic development secretary for former Gov. Matt Bevin.

Meanwhile, Braidy Industries’ biggest investor so far, Russian aluminum producer Rusal, has suspended its contributions after providing $75 million of the potential $200 million announced in April 2019. Rusal is holding back until Braidy Industries snags $300 million from other investors.

Braidy Industries is also looking to sell Veloxint Corp., its start-up subsidiary that hopes to commercialize metal technology emanating from the Massachusetts Institute of Technology, to raise cash as it seeks to build the aluminum mill in Boyd and Greenup counties.

The disclosures were made in an annual report and independent audit the company filed Monday with the U.S. Securities & Exchange Commission.

For the first time, the company’s auditors formally warn that there is “substantial doubt” about Braidy Industries’ ability to continue in business if it does not raise more capital within the next year. Braidy Industries had $53 million in cash on hand as of Dec. 31, which its auditor said is “not sufficient” to fund the company for the next year.

Kaylee Price, a spokeswoman for Braidy Industries, said in an email that the securities filing, “by nature of its purpose … is overly conservative and lays out all potential risks clearly.”

“We will not answer hypothetical questions but instead remain focused on working hard to raise the money,” Price, of Louisville’s RunSwitch public relations firm, said in the email. “Braidy is much leaner, stronger and closer than ever to finalizing financing and building the mill in Ashland, KY. Aluminum market conditions continue to favor Braidy’s business model.”

But the disclosure about the risk of the business ceasing operations is "a big deal," said Charlie Moyer, a University of Louisville finance professor, who has casually followed the Braidy Industries developments over the years.

"That doesn’t get done lightly. Miracles obviously can happen, but my long-term assessment of this company is that it's going nowhere," Moyer said. "We’ll see if I am right or wrong on that."

Some Kentucky lawmakers have called for the company to return the state’s $15 million or set it aside in a protected account as the aluminum mill, once projected to open this year, remains in planning stages. Braidy Industries now projects the mill to open in 2023.

The project was announced with much fanfare in 2017, with Bevin and other elected officials saying it represented the start of an economic revitalization of Appalachia. A Wall Street Journal editorial was quick to credit Kentucky’s new right-to-work law for Braidy Industries’ job creation.

“This is what hope feels like,” Bevin said at 2018 “groundbreaking” at the mill site, which the company’s lawyers would later call a “fake” ceremony because no construction began.

Under Bouchard, Braidy Industries said it would employ 600 factory workers at $65,000 annual wages. The company helped establish a two-year community college training program in Ashland but then rescinded jobs it promised 15 of the program’s initial graduates.

Now, Braidy Industries has until Dec. 31 to “invest” at least $1 billion in the Ashland aluminum mill or it could be obligated to return Kentucky’s $15 million with interest, assuming the company has funds to do so. Gov. Andy Beshear has said he will get state’s the money back if it’s clear the project isn’t viable.

The filing this week discloses no new investors but mentions one funding option the company hasn’t previously disclosed: a letter of intent signed June 14 to lease up to $900 million in equipment for the aluminum mill for five years from Sertant Capital, a Newport Beach, California company that finances industrial equipment for manufacturers.

Bouchard’s $6 million payout

Bouchard, who was embroiled in litigation with Braidy Industries after the other board members fired him as CEO in January, got the $6 million payout as part of a settlement of the legal battle. The settlement was announced June 9, but the terms were not disclosed until this week’s filing.

As part of the deal, Bouchard sold all his shares of Braidy Industries back to the company.

In an email to WDRB on Friday, Bouchard, of Naples, Florida, didn’t dispute that the settlement netted him about $1.33 per share. That’s a pittance compared to what Kentucky paid ($5 per share) and the $18 per share that mom-and-pop investors paid during the company’s “crowdfunding” offering.

“It’s been 5 years of blood, sweat and tears invested in my vision for (northeast Kentucky). That’s a chunk of the prime of my career. I’m disappointed, but decided to lead … I want the mill built and I want to make a difference on the future of 30,000 families. It’s all I ever wanted,” Bouchard wrote.

Gill complied with Kentucky ethics laws, company says

Terry Gill served as secretary of the Kentucky Cabinet for Economic Development under Republican Gov. Matt Bevin from 2017 to 2019.

The company disclosed in the filings that Gill, who served as the state’s top economic development official from 2017 to 2019, was hired in April as interim president of Braidy Atlas, its subsidiary that will build and own the aluminum mill. (In snagging the potential $200 million investment from Rusal last year, Braidy Industries gave the Russian firm 40% ownership of Braidy Atlas and thus, of the aluminum mill).

Gill had been a non-voting “observer” to the Braidy Industries board on behalf of Kentucky during his time in government and until his hiring by the company.

On April 29, Price, the company’s public relations representative, told WDRB that Gill was still an observer to the Braidy board. But the new disclosure says he was hired as an executive and added a full board member in April, without specifying a date. Price declined to say when exactly that happened.

Price said Gill took steps to ensure that his employment by Braidy Industries violated no state ethics rules.

“Mr. Gill left his role with the Cabinet (for Economic Development) in June of 2019 and has followed all laws and statutes since leaving,” Price said. “By state statue, he was required to wait 6 months before accepting employment compensation from any entity that has a relationship with the Cabinet and sought guidance from both the Executive Ethics branch and general counsel to ensure he had a full understanding of the statute.”

As part of the litigation with Bouchard, Braidy Industries commissioned a report that accused the former CEO of misleading the board about the status of potential investors, among other deceptive behavior.

That report says Gill, Kentucky’s board observer, became aware of the alleged deception as early as August 2019. But as WDRB reported in May, there is no evidence Gill alerted state officials or Bevin, who continued to project confidence in the project and call it a “good investment” through the end of his tenure as governor last year.

Reach reporter Chris Otts at 502-585-0822,, on Twitter or on Facebook. Copyright 2020 WDRB Media. All rights reserved.