Pittsfield Sues PathogenX for Repayment of GE Funds
PITTSFIELD, Mass. — The city is suing a medical waste company for repayment of GE Economic Development funds.
A lawsuit filed on June 13 says PathogenX "failed to establish actual and ongoing operations in the City of Pittsfield and furthermore failed to register with the Secretary of the Commonwealth to conduct business in the Commonwealth of Massachusetts."
In April, the city ordered the company to repay $70,000 that has been disbursed under the $150,000 agreement. As of mid-June, repayments hadn't been made, and Pittsfield officials allege that they were lied to about PathogenX's legitimacy and ability to bring operations to the city.
"As outlined in the Grant Agreement, the company was required to relocate its operations to Pittsfield and employ a minimum of three (3) individuals in the City by December 31, 2023, with continued operating and staffing levels to be maintained thereafter," an April 7 notice of default and demand of repayment reads.
"To date, PathogenX has failed to establish operations in Pittsfield and has no employees located within the City."
In 2023, the City Council allocated $150,000 of General Electric economic development funds to support the company developing a stand-alone onsite device that utilizes thermal heat to convert medical waste into safer waste by killing pathogens, bacteria, and viruses.
At the time, CEO Charles "Chuck" Berkeley, a Pittsfield native, said he wanted to start moving forward immediately with the goal of establishing a manufacturing facility and developing generation two technology by the end of 2024.
Now, a link to the company's website in a 2023 iBerkshires article no longer works, and its status on Pitchbook.com is "out of business." The city alleges that the company "operated as a shell corporation, failed to observe corporate formalities, and was dominated and controlled entirely by Charles Berkeley for personal gain."
Berkeley, the named defendant, is described as the "sole officer, director, president, treasurer, and secretary of PathogenX, Inc., and exercised complete control over the corporation."
The city is suing on counts of breach of contract, fraudulent misrepresentation, equitable relief, unjust enrichment, fraud in the inducement, and fraud. Pittsfield asks that the company repay the $70,000 dispersed plus costs, cover attorneys' fees, and "pierce the corporate veil" and hold Berkeley personally liable for the obligations of PathogenX Inc.
It also provides documents showing that PathogenX failed to pay taxes in its home jurisdiction of Wyoming and has been "administratively dissolved" as of October 2024.
The Economic Development Grant Agreement required PathogenX to establish legitimate business operations in Pittsfield by the end of 2023, stipulating that in the event PathogenX fails to remedy a contract breach within 120 days, it will have to repay all funds disbursed as of the date of the breach.
The city alleges that the company made material false representations, including the intent to establish legitimate business operations in Pittsfield and comply with the funding contract.
"These false representations were made knowingly, or with reckless disregard for the truth, and with the intent to induce Plaintiff to disburse public funds," it reads.
"… Defendants made false representations of material fact to the City, including, but not limited to, opening an office, leasing space, and hiring employees in the City of Pittsfield and its future intentions of establishing operations and meeting job creation benchmarks,"
"Defendants knew these representations were false when made, and/or made them with reckless disregard as to their truth and falsity."
Update: Devon W. Grierson, city solicitor, said on Friday morning that the city had made demand for repayment from PathogenX and that "they have not responded to any of our communications to date."
An email address could not be found for Berkeley and there has been no response yet for request for comment sent to the company's other co-founder.
"I have aspirations of doing more than just bringing a business here," Berkeley told the Community and Economic Development subcommittee in 2023.
"I want to do something for the kids. I know when I came up, I didn't have everything that a lot of other kids had, so if I could bring something to the community in that way as well as make PathogenX a household name, that would be really cool. It'll be a big accomplishment."
City of Pittsfield, PathogenX Inc. Lawsuit by Brittany Polito
Tags: economic development, lawsuit,
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