So, he's shifted all of his profits to salaries in the short term, and has a huge lawsuit that may end the company? You've got to put money away to weather the storms. Maybe 70k was a bit much for minimum wage.
Also, he's given raises and ignored seniority, skills and merit. What about the people that were making 60k? Why should a newbie come in and make equal to the people that have been there awhile?
I guess he's had Harvard Business School come out and do a case study on the business. My thoughts is that too big of a raise too soon, while not rewarding your strongest contributors has not been a good thing. Maybe someone can find the case study?