Fermi has escalated its ongoing corporate governance dispute with former CEO Fermi Inc. by filing a lawsuit on Wednesday night in the Texas Business Courts seeking judicial recognition of a recent bylaw amendment designed to restrict changes to the company’s board structure. The filing centers on efforts by former CEO Toby Neugebauer to expand the board and reshape its composition through shareholder action.
According to the suit, the company is asking the court to affirm the validity of a bylaw amendment approved by its board that raises the threshold for altering certain board composition provisions to a supermajority vote of 70% of all voting stock. Fermi argues the amendment was necessary to prevent Neugebauer from advancing a proposal that would allow a simple majority of shareholders to expand the board by five members, including himself.
The dispute traces back to mid-April, when Neugebauer called a shareholder meeting on April 16 to consider amending company bylaws. The proposed amendment would have allowed a simple majority vote to expand the board. The following day, April 17, Neugebauer set the meeting date for May 29. On that same day, the board removed him from his position as CEO.
Since then, both sides have advanced competing claims about the legitimacy and timing of shareholder actions. Neugebauer has maintained in filings with the U.S. Securities and Exchange Commission and in public statements that the May 29 shareholder meeting was validly called. He has also indicated that if the meeting is blocked, he and aligned shareholders would pursue a separate special meeting at the end of June.
Fermi disputes that position, stating that the current CEO’s office has cancelled the May 29 meeting altogether. The company further argues that Neugebauer’s proposals are not aligned with shareholder interests.
On May 8, Fermi filed an application in the U.S. District Court for the Northern District of Texas, Lubbock Division, seeking a temporary restraining order. The company asked the court to declare that no meeting is scheduled for May 29 and to bar Neugebauer from taking steps to convene it. On Wednesday, Judge James Wesley Hendrix denied the request.
In its Wednesday press release, Fermi outlined its opposition to Neugebauer’s efforts to solicit shareholder consent for a follow-up meeting scheduled for June 30, 2026. The company stated:
“With respect to the second of Mr. Neugebauer’s proposals seeking to solicit shareholder consents to hold a second Special Meeting of Shareholders on or about June 30, 2026, Fermi believes Mr. Neugebauer’s consent solicitation is not in the best interests of its shareholders and recommends that shareholders not tender their consent.”
The governance battle is further complicated by competing claims over ownership structure and past compensation. Neugebauer has asserted that he, his family, and executives who departed on or after April 17 collectively hold approximately 40% of the company’s stock. Fermi, however, has alleged that Neugebauer acquired a majority of his shares at a price of $0.0067 per share, contrasting sharply with the company’s public listing price, which opened at $21.
This latest legal action follows an earlier lawsuit filed by Neugebauer on May 1. In that case, he challenged the validity of his April 30 removal from the board of directors. Neugebauer has also nominated five individuals, including himself, to the current seven-member board and has named existing directors Larry Kellerman and Miles Everson as part of his slate.
Fermi, in its own filings, has argued that the company struggled under Neugebauer’s leadership. It also disclosed that it initiated an independent investigation into his conduct following a report published by Politico that described a confrontation between Neugebauer and U.S. Commerce Secretary Howard Lutnick.
After being removed as CEO on April 17, Neugebauer has reportedly asked for the company to assess all options to maximize shareholder value. He has also proposed additional board nominees in the event that the May 29 meeting does not proceed and shareholders move forward with a special meeting at the end of June.
