Former Triangle CEO accused investors of theft and abuse. Now he admits he was lying.

A former Triangle pharmaceutical CEO who was forced out of his job in 2014, and afterward waged an anonymous disinformation campaign against a pair of Durham venture capitalists, has settled a defamation lawsuit and apologized for his actions.

The settlement ends a three-year conflict for Kenneth Moch, who has also agreed to pay more than $1.3 million to compensate the venture capital firm, Pappas Ventures, for damaging the company’s reputation. Pappas, which had originally sought $10 million from Moch in its defamation suit, was a major investor in Chimerix Pharmaceuticals at the time of Moch’s ouster from the CEO position he had held for a decade.

Pappas Capital announced the settlement Monday, but the matter was basically resolved last fall after a Durham County Superior Court judge issued a summary judgment in the defamation lawsuit, saying Moch’s accusations were groundless.

“Mr. Moch has not been able to identify so much as a dollar of misuse or misappropriation,” Durham County judge Michael O’Foghludha wrote in September. “The allegations are false, and the jury will be so instructed at trial.”

Aside from Moch’s retraction and apology, which Pappas provided on request, the terms of the settlement are confidential. However, public records filed with the Orange County Register of Deeds show that Moch and his wife Ellen Stolzman put up their 10,000-square foot Chapel Hill house, assessed at almost $2 million in Orange County property records, as collateral for the more than $1.3 million Moch agreed to pay to Pappas Capital. The filings show Moch still owes $268,000 to Pappas.

“Kenneth Ian Moch has retracted allegations of financial malfeasance that he made, anonymously, against two of the firm’s senior executives,” Pappas said in its statement. “He also retracted all other disparaging statements that he made about Pappas Capital over the course of litigation that extended over more than two years.”

The settlement sum is separate from the $269,054.77 that Wake County Superior Court awarded last year to Pappas as sanctions against Moch and his Winston-Salem lawyer Jeffrey Patton. On July 3, the N.C. Court of Appeals upheld the sanctions, saying that “Moch used the filing of this lawsuit as a vehicle ... to attack the Defendants’ professional reputations.”

In an email Monday, Moch said he settled the dispute last October. Moch said he is no longer a party to the legal case over the court sanctions, and said that Patton and his firm did not represent him in the settlement.

In his undated retraction, Moch repudiated the anonymous emails he had sent out “and all other disparaging statements” about Pappas executives Art Pappas and Ford Worthy.

“The statements I made in the emails were false and it was wrong for me to send them,” Moch’s retraction says. “I regret sending the emails and I apologize to Mr. Pappas and Mr. Worthy and their families, and to Pappas Ventures and its employees and investors, and I wish them the best in the future.”

In 2014, Chimerix became the focus of an intense social media campaign by a Virginia family seeking Chimerix’s experimental anti-viral drug to treat their 7-year-old son, Josh Hardy, who had battled cancer since he was a baby and had developed a life-threatening infection. Chimerix initially refused to release the drug, brincidofovir, saying it would violate ethical protocols. But the company reversed itself under mounting public pressure so that Josh could take the drug as part of a pilot program arranged with the U.S. Food & Drug Administration. (Josh would later die at age 10.)

Chimerix became the topic of global news coverage, often portrayed as an unfeeling corporation bound by rigid protocols and profits instead of empathy and compassion. During this tense time, Moch started receiving death threats and the Chimerix office was put under armed guard for the safety of the employees.

Shortly thereafter, two Chimerix board members met with Moch over breakfast and gave him an ultimatum: resign, or be fired the next day. The reasons for the board’s dissatisfaction with Moch were unclear. “Moch chose to resign. He was upset by the board’s decision,” according to court order issued last September by the Durham County Superior Court.

Within several months of Moch being pushed out, anonymous emails sent to investors and then-State Treasurer Janet Cowell in 2014 and 2015 accused Art Pappas and Worthy of misappropriating $2 million and Pappas of committing domestic violence. The firm eventually traced the email chain back to Moch, and offered not to report him to law enforcement for cyberstalking if he paid at least $10 million for the damage he caused to the firm’s reputation.

Moch, a graduate of Stanford and Princeton universities, has since become an active public speaker on the issue of bioethics, based on his experience at Chimerix. In 2016, Moch became CEO of Pittsburgh start-up Cognition Therapeutics, a 15-employee company that is developing a drug to restore memory to Alzheimer’s patients.

This story was originally published July 17, 2018 at 9:03 AM.