FalconStor Software President, CEO Abruptly Resigns


Disk-based data protection and storage virtualization vendor FalconStor Software on Monday said that Jim McNiel has resigned as president and CEO of the company, as well as from the company's board of directors.

Gary Quinn, executive vice president and COO, is taking over for McNiel as interim CEO.

FalconStor Software, in a statement, said that McNiel "voluntarily" resigned his positions to pursue other opportunities.

[Related: New CEO, Sales VP Promise To Reinvigorate FalconStor's Brand, Technology]

Eli Oxenhorn, chairman of FalconStor's board, said in a statement, "We want to thank Jim for his three plus years of service and for his contributions to the Company. We wish him all the best for his continued success in his career. We are fortunate to have an executive of Gary Quinn’s caliber to serve as interim Chief Executive Officer."

McNiel in February of 2011 took over the CEO role of FalconStor.

McNiel at the time was interim CEO after the
abrupt resignation the preceding September of Founder ReiJane Huai as FalconStor Software's president, CEO and chairman. Huai resigned after disclosing that bribes were paid to secure an important customer contract.

Quinn in April 2012 joined FalconStor as the company's new vice president of North American sales after a four-year stint as the CIO of the Suffolk County, New York, Department of Information Technology. Prior to that, he spent 20 years at CA Technologies, most recently as that company's executive vice president of international sales and North American channel sales.

One former FalconStor channel partner said that McNiel and Quinn complemented each other.

"McNiel had a strong vision for FalconStor," the former partner said. "Quinn is a strong leader who can really get things done."

It has been a tough last few years for FalconStor.

FalconStor in April reported revenue for the first quarter of 2013 of $15.3 million, down 21 percent compared to the same period a year ago. The company also reported a GAAP loss for the first quarter of 2013 of $4.4 million compared with a loss of $2.4 million for the first quarter of 2012.

For all of 2012, FalconStor reported revenue of $75.4 million, down 9 percent over the prior year. GAAP loss for 2012 was $15.0 million compared to $23.4 million in 2011.

FalconStor in January reached a $5-million settlement in a long-running investor lawsuit stemming from bribery charges leveled in 2010 against the company's founder, ReiJane Huai, and two of the company's sales representatives. That class-action lawsuit followed allegations that Huai and the two reps bribed JP Morgan Chase, a FalconStor customer.

PUBLISHED JULY 1, 2013