Georgia-based medical services company Bako Pathology this week sued to stop its two founders from opening a competing firm, the latest development in a legal saga that has exploded with allegations of illicit sex, violence and illegal drug use.
The dispute, now unfolding in two Delaware courts, centers on Dr. Bradley Bakotic, a podiatrist and former Bako CEO, who left the company with co-founder Dr. Joseph Hackel in 2017. Late last year, the pair filed suit in Delaware Superior Court, asking a judge to invalidate their agreements not to do work competing with Bako for two years after departing.
On Wednesday, Bako fired back with its own Delaware Court of Chancery lawsuit, accusing Bakotic and Hackel of replicating the same marketing strategy they developed at Bako in order to start a rival firm and lure business away from Bako. Lawyers for the company said Bakotic and Hackel’s Rhett Diagnostics would perform the same services as Bako and that the defendants had even mimicked Bako’s nonprofit foundation to promote their new brand.
“Under the guise of ‘giving back’ through their ‘nonprofit foundation,’ defendants have begun running the exact same marketing playbook that was part of their job duties while at Bako Diagnostics in order to build ‘Rhett’ into a national brand,” Bako’s Jackson Lewis attorneys wrote.
“Defendants maintain these are ‘altruistic educational endeavors’ that do not compete with Bako Diagnostics, but in reality this marketing campaign (which defendants perfected at Bako Diagnostics) is designed to do just that.”
The 26-page complaint asks for an “emergency” injunction to block the doctors from opening their planned lab, located just one mile from where Bako offers its molecular pathology and microbiology services, according to the filing.
Bakotic and Hackel have skirmished for nearly seven months with their former employer in Delaware, where Bako is incorporated, in a case that has at times turned ugly. In December, they filed a Superior Court complaint for declaratory judgment, arguing that the noncompetes they signed with Bako were invalid in light of a provision of Delaware law that bars agreements restricting “the right of a physician to practice medicine.”
Bakotic and Hackel sold much of their interests in Bako to a private equity firm in 2016. According to court documents, Bakotic received $30.4 million in cash and equity, while Hackel got $14.4 million.
Bako’s lawyers have said in court filings that the company wants the money back as compensation for damage caused by their “unprofessional and destructive conduct,” which led to their departures last year. A February court filing cited a report by Latham & Watkins that said Bakotic had admitted to engaging in “sexual relationships with multiple subordinate female employees” and had provided cocaine to two female employees during a work conference.
The filing also included a letter from an attorney representing a regional sales manager, who said she had a sexual affair with Bakotic. According to the letter, Bakotic physically attacked the woman last July at her apartment, where he “brutally struck [her] in the face,” with enough force to draw blood and knock her to the ground.
It also claimed that Hackel admitted to having sexual relations with a female employee.
Attorneys for Bakotic and Hackel responded by calling the allegations an attempt at “character assassination” that were not relevant to the case.
“Defendants are willing to use this court and its compulsory powers in a campaign of character assassination because the Delaware legislature declared the public’s right to medical choice outweighs the interests of private equity,” they said in a March 5 filing.
According to Bako, Bakotic and Hackel told Delaware Superior Court Judge William C. Carpenter in April that their new business would feature “a lab that does veterinarian pathology and other things that Bako does not do.” However, the pair later “abandoned any pretense” of practicing veterinary pathology when they indicated their intentions to compete with Bako in May, Bako’s attorneys said.
The company notified Carpenter about the Chancery Court lawsuit on Thursday, the day after it was filed.
In Wednesday’s filing, Bako said it would suffer irreparable harm if Bakotic and Hackel were allowed to open their lab. The suit, which has been assigned to Vice Chancellor Joseph R. Slights III, seeks fast-track treatment of its claims for breach of contract and tortious interference with business relationships.
Attorneys for both sides did not return calls Friday seeking comment on the two lawsuits.
Bako is represented in both cases by Robert Capobianco and Adriana Midence of Jackson Lewis in Atlanta and Lauren Russell of Young Conaway Stargatt & Taylor in Wilmington.
An online docket-tracking service on Friday did not list attorneys for Bakotic and Hackel. The doctors are represented in the Superior Court action by Cary Ichter and William Daniel Davis of Ichter Davis in Atlanta and Robert Cahall of McCormick & Priore in Wilmington
The Chancery Court case is captioned Bako Pathology v. Bakotic.