Local Investors in BioErgonomics Ask Court to Certify Class Action naming Ronald Erickson, the Former Chairman of the Board

MINNEAPOLIS, MN:  On Thursday, July 21, 2011, former investors in BioErgonomics will ask the Court to certify a class action on behalf of 463 local angel investors who invested over $30 million in BioErgonomics, Inc. (BioE) and lost their entire investment, due to what they allege was a fraudulent transfer.

Background:  BioE is a small, privately held biomedical company based in Vadnais Heights, Minnesota.  The company designs, develops and commercializes human umbilical cord blood stem cells.  Many of the local investors were drawn to the company based upon its commitment to use umbilical cord stem cells and because the Roman Catholic Church had publicly supported the use of these types of cells for drug discovery and therapeutic research.

Case Allegations:  The former BioE shareholders filed their Complaint on October 20, 2010, alleging that the Company’s former officers engaged in an asset transfer which rendered their entire investment worthless. The Complaint alleges that in October 2009, BioE was worth at least $19 million but facing default on $4.6 million in loans to two creditors.  In response, certain BioE “insider” directors fraudulently conveyed all of the company’s assets to the two creditors through a new company, “New BioE”, without following proper and lawful corporate procedures.    New BioE continued with the same employees, same website, same patents, and same business, in the same location.  The original BioE was out of business and the shareholders’ entire investment of $30 million was eliminated.  One of the creditors was a company led by BioE’s Chairman of the Board, Ron Erickson.  Erickson was Chairman of the creditor, Queenwood Capital Partners, LLC.  (Erickson is also Chairman and CEO of Holiday Companies; Vice Chairman of Gander Mountain Company, Inc. and now Chair of New BioE) The investors are challenging the legality of the process by which all shareholder assets were extinguished. 

Hearing:  The hearing is scheduled to take place Thursday, July 21 at 8:30 a.m., in the Hennepin County Government Center, courtroom 1459.  The Honorable Lloyd B. Zimmerman is presiding.  Please note that no cameras are allowed in the courtroom, but the media is welcome to attend the hearing.

View the Motion to Dismiss Order 

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