Michael McNamara, a former senior deal maker at Potentia Capital, has filed a lawsuit against the technology-focused buyout firm, alleging it is illegally withholding $3.6 million in profits from funds he personally invested in.
The legal action marks the latest escalation in internal strife at the private equity group, which has recently been plagued by executive departures and a public rift between its co-founders.
McNamara claims that Potentia Capital engineered a fabricated default to justify wiping out his share of the fund's profits.
The allegations suggest a breakdown in the firm's governance and profit-distribution mechanisms, raising questions about how the firm manages conflicts of interest between its management and its investors.
For limited partners and potential new capital providers, such litigation signals heightened operational risk and potential instability in the firm's leadership structure.
The lawsuit arrives against a backdrop of significant organizational turbulence at Potentia Capital.