The new allegations stem in part from internal emails that Globant produced during the litigation. According to the amended complaint, those emails reveal that Globant consultants, executives and officers were aware of serious problems with Globant’s performance but concealed them from CCG and its management team. For example, in an October 2018 email to his Globant colleagues, Globant executive and former Chief Financial Officer Alejandro Scannapieco joked about Globant’s numerous performance failures, stating: “Ha, if we had to put together a book on how to do lots of things wrong … we won it!”
The amended complaint chronicles similar internal admissions in which Globant executives lamented their inability to deliver the ERP solution for CCG. Those internal emails include admissions that, because Globant had “lost a large number of US team members . . . . we are left with a massive skills, seniority, and knowledge gap that can’t be improved with anything other than time.” Globant consultants also acknowledged that they were “working on features we don’t fully understand but with limited budget/time, which as you know, cannot work”; that there was “[b]ad distribution of the management team”; and that “nobody was working on a plan in order to place everything under control.” One Globant consultant requested permission from her superiors to inform CCG of the status of the project, stating, “I would like to … tell them that we are implementing this plan instead of blowing smoke.”
The lawsuit states that when Globant took over the project, it agreed to complete it by a firm deadline and for a fixed price. But after it pocketed the last payment from CCG, Globant issued ultimatums to CCG, threatening to abandon the project unless CCG paid fees in excess of the fixed price. Globant consultants are alleged to have discussed these threats internally, with one consultant instructing another “to go to [CCG] and say they have to pay $1m to finish the project and/or we will pull the ERP team Monday.” According to the amended complaint, Globant consultants internally discussed their efforts to withhold the truth from CCG, with one executive stating, “I feel if we go with straight honesty and share what it will take to complete we are in a better position. Risky but he [CCG’s CEO Steve Eichenbaum] has never been told the real deal.”
The lawsuit alleges that had Globant told the truth from the outset and not engaged in a “bait-and-switch” strategy, CCG would have been able to avoid paying Globant millions of dollars for useless software.
“Globant strung us along with false assurances after taking over the project and committing to a fixed-price contract with a firm deadline,” stated CCG’s Chief Executive Officer, Steven Eichenbaum. “This is not the conduct we expect from our vendors, and we intend to pursue our claims aggressively to hold Globant accountable.”
The lawsuit alleges that Globant’s misconduct inflicted millions of dollars in damages on CCG.
CCG is represented by Mark P. Ressler, Thomas B. Kelly, and Maria Ruiz from the law firm Kasowitz Benson Torres LLP.
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