BioVeris Corp. is seeking to dissolve a joint venture run by Jacob N. Wohlstadter, the son of its chief executive, who is accused of using company money to buy cars and real estate.
BioVeris said in a written statement that it filed a lawsuit yesterday in Delaware state court to end the joint venture, which is developing testing technology for BioVeris, the Gaithersburg biotechnology company created and headed by Jacobs Wohlstadter's father, Samuel J. Wohlstadter.
BioVeris said it asked the Delaware Chancery Court to appoint a trustee to liquidate the joint venture's assets. The lawsuit accused the younger Wohlstadter of breach of contract and breach of fiduciary duty, the company said.
The Securities and Exchange Commission has informed BioVeris that it has opened an informal inquiry into the joint venture, the company said.
BioVeris has accused Jacob Wohlstadter of using money from the joint venture to buy or put down deposits on at least 10 cars and three properties, including a $136,000 BMW Roadster and a $4.2 million condominium in the new Time Warner building in New York City.
Wohlstadter has not denied that money from the joint venture was used to make the purchases. In court papers, he said he has since reimbursed the joint venture, called Meso Scale Diagnostics.
Jacob Wohlstadter is trying to buy BioVeris's share of the joint venture, according to court papers, and as part of that effort is trying to remove BioVeris's president, Richard J. Massey, from its two-member management board. Wohlstadter is the other member.
BioVeris filed a motion last month to stop Wohlstadter from removing Massey. The court granted its request.
In its statement yesterday, BioVeris said it agreed on July 6 to put its initial lawsuit on hold -- and avoid filing new actions -- while both sides sorted out the information needed to file BioVeris's annual financial results.
BioVeris said it terminated the agreement on July 13 after the joint venture did not provide certain information to its auditors. On Thursday, BioVeris filed unaudited and incomplete financial results for the year ending March 31.
Neither Jacob nor Samuel Wohlstadter returned a phone call yesterday. A BioVeris spokesman declined to comment on the lawsuit.