June 26--WORTHINGTON -- G. Steven Burrill, a keynote speaker at the Worthington Bioscience Conference in 2009 and 2011, is facing charges of fraud in a civil lawsuit filed by a former employee.
Burrill, who attempted to raise $1 billion in private equity for the troubled Elk Run bioscience park in Pine Island, has been ousted from control of a $283 million venture capital fund amid allegations of mismanagement.
Burrill, CEO and founder of San Francisco-based Burrill & Co., was removed as a general partner of Burrill Life Sciences Capital Fund III on March 20, according to documents filed June 13 with the San Francisco County Superior Court of California.
The documents were filed in connection with a lawsuit brought by former managing director Ann Hanham, who accuses Burrill of fraud and claims she was wrongfully terminated from his company. The company specializes in biotechnology and life sciences investing.
"I am shocked. This seems to be more serious than a mere philosophical or management style disagreement," said Abraham Algadi, manager of the Worthington Regional Economic Development Corp., which also coordinates the Worthington Bioscience Conference.
Hanham alleges Burrill fired her because she notified the fund's advisory committee that he had overseen $19.2 million in "improper and unlawful transactions." She also claims that Burrill deliberately undermined the value of shares she owned in the company.
The lawsuit, filed in February, says that Burrill was removed as general partner because of the unauthorized payments and because he failed to make required capital contributions of $453,929.
Burrill was a controversial figure in Minnesota well before the lawsuit. In 2009, he announced plans to create a $1 billion private equity fund for the planned 200-acre Elk Run bioscience park. That plan ultimately collapsed, despite Burrill's assurances multiple times that the park would succeed.
Algadi stated, "This is very bad news indeed for Pine Island, and I am not sure given what transpired over the last two years that the project has a snowball's chance (you know where)."
There hasn't been any movement on the project. In December, the Minnesota Department of Transportation released the city of Pine Island from a $3.65 million penalty it owed when jobs failed to emerge. The city had promised jobs to MnDOT in return for a $45 million interchange at U.S. 52 and a realigned Olmsted County 5/12 that would improve access to Elk Run.
"With Mayo's Destination Medical Center well under way, and all the setbacks the Elk Run projects seems to encounter at every turn, I am not sure that Pine Island will be able to attract bio-based businesses anymore. Instead, they will have to be content -- if at all lucky given Pine Island tax and debt load -- attracting a McDonald's or perhaps another used car dealer," said Algadi, who is a former Pine Island's city administrator.
"They may want to check out Worthington bio-business park and see how Worthington bio-based businesses are doing," he added.
Daily Globe Reporter Erin Trester may be reached at 376-7322.
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