A former employee of the Austen BioInnovation Institute in Akron has accused the non-profit of using him as a scapegoat to cover for its own failures that ultimately led to a $3 million lawsuit against it.
Kirk Krogstad — who worked for ABIA between February 2014 and December 2015 — said during an interview Wednesday he wants to set the record straight after ABIA filed a lawsuit accusing him of stealing confidential and proprietary information when he left the organization.
“They have really messed up my life for no reason that I can find,” Krogstad said. “The first thing I want is an unambiguous record that I have done nothing wrong.”
Krogstad in recent weeks has countersued ABIA, seeking more than $125,000 in damages for defamation, emotional distress and other claims.
All of the litigation — the $3 million lawsuit against ABIA, ABIA’s lawsuit against Krogstad, and Krogstad’s countersuit against ABIA — revolves around ABIA’s work with the Israeli medical technology company E-Qure Corp., particularly during a time ABIA was running out of money.
E-Qure claims it paid ABIA about $500,000 to help gain regulatory approval for an electrotherapy device to treat bed sores and open wounds. It has since sued ABIA for $3 million, claiming ABIA failed to do its job, causing E-Qure’s stock price to plunge.
ABIA, meanwhile, claims it couldn’t complete the work for E-Qure because, with the departure of Krogstad, it no longer had the staff expertise to do it.
And Krogstad said he is devastated because the claims ABIA has made against him are false and have caused him to lose work.
“They put me in the paper as a thief,” Krogstad said during a two-hour interview Wednesday. “I have acted fairly with everyone involved in this process ... their claims against me are now going to be on the Internet for the rest of my life.”
ABIA officials Wednesday declined to comment.
“We’re going to let it work its way through the legal system,” ABIA spokesman Scott Rainone said.
A promising start
When ABIA launched in 2008, Akron leaders touted it as a job-creating engine that could help lead the region out of the Rust Belt and into the Brain Belt. It started strong with about $70 million in funding — pledges from Akron hospitals, the University of Akron, the John S. and James L. Knight Foundation and others — but never came up with a plan to sustain itself, even now, with a staff of only about four full-time employees.
Soon after Krogstad was hired in February of 2014, cracks began to show.
In June, ABIA landed its largest client — E-Qure — and one month later, ABIA laid off about one-third of its staff.
Krogstad survived and said he spent most of his time working as a “mini librarian,” helping his two bosses gather hundreds of pages of documents to submit E-Qure’s project to the U.S. Food and Drug Administration.
In court filings, Krogstad said he had “little to no experience” in the process. And even though his bosses did, ABIA struggled, blowing its first deadline with the FDA and then submitting more than 600 pages that the FDA said were full of “glaring omissions.”
Tumultuous work
In December of 2014, ABIA’s president and CEO, Dr. Frank Douglas, stepped down and Krogstad went on family leave because he and his wife were expecting a newborn and his father-in-law was dying of cancer, Krogstad said.
Krogstad returned in January and in March, the FDA notified ABIA that its most recent submission on behalf of E-Qure — which happened while Krogstad was on leave — had 65 deficiencies.
ABIA fired one of Krogstad’s bosses in April after he raised a long list of concerns about mismanagement at ABIA. In June, Krogstad’s other boss — Rob Ngungu, director of ABIA regulatory affairs and product development strategy — resigned, sending an email to ABIA officials warning them that Krogstad was ill-prepared, court documents show.
“As a caution, ABIA has had the historical tendency to use interns and inexperienced individuals for such professional roles ... this is not a learning opportunity,” Ngungu wrote about E-Qure and another client.
Krogstad, he wrote, “is in no position to take on such a significant undertaking, otherwise ABIA risks liability from the client.”
Nevertheless, Krogstad said he forged ahead alone, meeting with the FDA officials and others, trying to push the E-Qure project forward while looking for another job.
In December, Krogstad gave ABIA two weeks notice after securing a contract as a medical writer for a division of Johnson & Johnson.
Days later, ABIA officials sent a letter to E-Qure saying that, with Krogstad’s departure, it no longer had “any qualified technical or administrative staffing to support the endeavor.”
No permission granted
E-Qure officials considered the email a termination of its contract with ABIA, court records show.
On Dec. 11, Krogstad put all electronic documents related to E-Qure on ABIA’s shared drive and boxed paper copies of all essential documents and left them with ABIA, court records say.
Before he left that day, Krogstad said Joe Randazzo, interim leader of ABIA, asked him to compile the work ABIA had already done for E-Qure in the coming weeks so Randazzo could pass it on to E-Qure.
On Dec. 21, E-Qure sent an email to ABIA demanding all documentation regarding its device and a full refund.
The same day, Randazzo emailed Krogstad — now working his new job — and said he wanted a copy of the E-Qure project.
Krogstad replied in emails, saying he would need permission to use materials from ABIA to complete the project.
Krogstad also told Randazzo that E-Qure had asked him to work with them to complete what ABIA had started. In an email, Krogstad assured Randazzo that any work he might do for E-Qure “would be based upon documentation provided by E-Qure, only.”
At the beginning of January, Krogstad said he sent follow-up emails to Randazzo stating that he had not forgotten about the project. Randazzo never responded, Krogstad alleges in his countersuit.
Krogstad is now working with E-Qure on a part-time contract. He insists he uses only documents provided by E-Qure, not ABIA.
What confidential or proprietary information ABIA thinks he stole remains unclear, he said. ABIA officials have not told him, he said, nor have they included specifics in court filings.
Krogstad, meanwhile, said he wants to regain his reputation.
“Money is not my first priority, frankly,” Krogstad said Wednesday. “In a year or two, I just want this in my rearview mirror.”
Amanda Garrett can be reached at 330-996-3725 or agarrett@thebeaconjournal.com.