Ask HN: Can founder release a product under a new company using employees?

It was recently discovered that a co-founder had taken around $10k of money from our company bank account two years ago for personal use, and had covered it up without telling any of the other founders. As of today, all co-founders but him have resigned from the company due to severe financial difficulties.<p>We have recently discovered that he has set up another company and is planning to release a product that has been developed by the original company employees. This means that the original shareholders are excluded from any benefits derived from the original company. Is this ethical and/or legal?