A dispute is escalating between a co-founder and the current leadership of Fermi America, the company behind the massive hypergrid AI campus being built in the Texas Panhandle, following recent major changes.
Toby Neugebauer, former CEO of Fermi and a co-founder of the company, has filed a lawsuit against the Fermi board after his removal and is calling for a public meeting of shareholders later this month.
According to a news release, Neugebauer, the largest shareholder of the company, announced on Tuesday, May 5 that he has called for a special meeting of shareholders to be held on May 29 “in his capacity as Chief Executive Officer of Fermi on April 17, 2026, and has filed preliminary proxy materials in connection with the Special Meeting.”
The release states that the meeting would provide shareholders with their first opportunity since the initial public offering to express their views about the future of the company. The release also notes that “Thus far, Fermi has rejected a potential sale or merger of the Company.”
Fermi has been working on its private power hypergrid and AI data center campus, Project Matador, near Amarillo in the Texas Panhandle over the past year, steadily obtaining multiple agreements and permits for land, energy and water since the project was first announced in June 2025.
According to an SEC filing about the meeting, “Project Matador has become a scarce and strategically valuable platform for AI power and data-center infrastructure. The Fermi Founder Parties believe the Board should immediately launch a credible, well-executed dual-track process, led by independent financial and legal advisors, to evaluate the Company’s standalone plan against potential strategic transactions that may include a sale, merger, majority buyout, share exchange, or strategic partnership that could deliver a change of control premium and reduce remaining project execution risk.”
The filing states the meeting will be held to amend the company’s bylaws, increase the board size and elect new members. Additionally, “Mr. Neugebauer does not intend to return to management if elected as a director … Instead, his primary focus is ensuring that the future of Fermi is overseen by directors prepared to conduct an independent process that fully tests whether shareholders are best served by the standalone plan or by a value-maximizing transaction with a strategic or other counterparty.”
According to the May 5 release, at the special meeting, Neugebauer plans to nominate five directors for election and “has already designated two industry titans who fully understand the Company’s true value — the former Chief Financial Officer and current Chief Power Officer — to the Board.” Neugebauer filed a definitive proxy statement and accompanying BLUE proxy card with the SEC and is soliciting shareholders to vote for the director nominees and other proposals.
Fermi issues response
Fermi said in response to Neugebauer’s SEC filings that “The Board is disappointed that Mr. Neugebauer has submitted these proposals and is seeking to take control of the Board and Fermi, believes the SEC filings reflect the actions of a disgruntled former CEO who was terminated for cause, and recommends that shareholders not take any action to support either solicitation. Fermi would note that in both requested actions, Mr. Neugebauer has proposed that Fermi reimburse Mr. Neugebauer for all of his costs associated with his efforts to take control of the Board.”
The company argued that the shareholder proposals submitted by Neugebauer were invalid. Fermi said in a news release that the decisions involving Neugebauer “were taken after more than a month of attempts to negotiate a peaceful transition” and after careful deliberation. The Fermi release also stated that the company’s stock price had a decline of more than 80% while he was CEO, and his termination for cause was for conduct violating the terms of his employment agreement as well as multiple company policies.
“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,” Fermi stated. “Considered together, each of Mr. Neugebauer’s proposals seek to expand the size of the Board, fill it with his nominees, take control of the Board and Fermi and pursue his stated goal of selling Fermi, quickly.”
Fermi also stated that its rejection of the request for an immediate sale has been validated by support from “multiple stakeholders and potential counterparties” who have expressed support Fermi’s change in leadership and strategic plan to build on the continued momentum of Project Matador. The company added that Neugebauer’s calls for shareholder action “appear purposefully designed to derail any success Fermi 2.0 and the Company’s strategic plan might achieve.”
As previously reported, after Neugebauer stepped down as CEO, the Fermi board of directors voted to terminate Neugebauer’s employment with the company “with cause,” and he was also immediately removed from the board. In another SEC filing, Vicksburg Equity Holdings, as assignee from TMNN, exercised TMNN’s right to nominate, and the Fermi board of directors on May 4 elected Chief Power Officer Larry Kellerman to the board to fill Neugebauer’s vacancy.
Milestones met under Neugebauer’s leadership
Designed as a 7,500-acre, 17 gigawatt private power grid and data-center campus near Amarillo, Project Matador is intended to serve hyperscalers and other large power users through long-term tenant agreements. The release from Neugebauer’s team also detailed how the project has reached several milestones in the 15 months leading up to his removal as CEO.
A release says that Neugebauer is being advised by a leading investment bank, and he believes “the right partner will have a low cost of capital, a proven ability to construct, and is either a customer, or has a customer, at the table. A key focus of this process is allowing his colleagues and the Amarillo community to see the project to fruition.” He also is pushing for the board to immediately execute a dual-track process at “Fermi speed” to assess all options to maximize shareholder value, according to the release.
“Given the capital intensity, the infrastructure complexity, and multiparty execution demands at Project Matador, Mr. Neugebauer is fully behind strategic transactions.” The release notes that, combined, he, the Neugebauer family, and other executives and management that departed on or after April 17 own more than 40% of the outstanding shares.
“I could not be prouder of the execution and progress with tenants at the time of my departure. I saw Project Matador’s potential realized, and that’s why I have yet to sell a single share of Fermi since the IPO because I know exactly what it is worth,” Neugebauer said. “We built a world-class company in record time, and my focus is entirely on protecting and realizing that value for all shareholders. It’s time the shareholders get a voice in the future of the Company.”
Lawsuit filed to seek temporary injunction
In a lawsuit filed May 1, Neugebauer requested a temporary restraining order and temporary injunction against Fermi Inc., and the board, seeking emergency injunctive relief to prevent them from attempting to exclude him from the board in direct contravention of state law and the company’s governing documents, arguing the actions would result in significant market confusion and further damage. “This would cause irreparable injury to any company, but it will be particularly harmful for the Company, which is currently in a critical stage of its development.”
The lawsuit says Fermi was originally an LLC governed by a board of managers, but it was converted into a Texas corporation in connection with an IPO on Sept. 30, 2025. As part of that conversion, Fermi entered into certain director nomination agreements. “Fermi’s Certificate of Formation and Bylaws also provide that shareholders alone may remove directors, and do not allow the Board — much less a Board committee — to usurp that responsibility,” the lawsuit states. Additionally, the lawsuit argues that rather than by employment agreement, Neugebauer’s seat on the board was as the designee of the entity manager TMNN Manager LLC, before the employment agreement was ever signed.
This article originally appeared on Amarillo Globe-News: Dispute grows between Fermi and co-founder Neugebauer
Reporting by Kristina Wood, Amarillo Globe-News / Amarillo Globe-News
USA TODAY Network via Reuters Connect
