BIO attendees in San Diego, including this reporter, have one fewer item on their packed calendars. Biotech venture capitalist G. Steven Burrill, accused of fraud and wrongful termination by a former employee in a civil lawsuit, has cancelled his annual speech at the industry’s biggest convention, which is being held here this week.
A spokeswoman for the San Francisco-based financier told Xconomy that Burrill made the decision Friday and has decided to keep a low profile. Burrill has not made a statement since news of the lawsuit broke last week.
The spokeswoman said his lawyers should file a response to the lawsuit by the end of July. The suit was brought by Ann Hanham, a former managing director of Burrill’s venture firm, Burrill & Co. She has accused him and two others at the firm of improperly diverting more than $19 million earmarked for investment.
Victor Hebert, a lawyer who has worked with Burrill & Co. for years, first as outside counsel and then on staff, and Helena Sen, the firm’s chief financial officer, are also named as defendants, as are Burrill & Co. and Burrill Capital themselves.
Burrill’s alleged conduct led his limited partners—his investors—to oust him this March from control of Burrill & Co.’s third general venture fund, which is in the middle of investing $283 million, according to court documents. News of his removal became public through Hanham’s lawsuit.
One of the LPs, North Carolina Retirement Systems, acknowledged Burrill’s removal and kept open the possibility of more litigation. A spokesman for the North Carolina treasurer’s office sent a statement to Xconomy that read in part:
“The Retirement Systems’ attorneys believe Burrill’s actions were unlawful in a number of respects. The Retirement Systems, in consultation with the North Carolina Attorney General’s Office, will continue to work with other investors on the Fund’s Advisory Committee to aggressively enforce all legal rights and will file litigation if necessary.”
Xconomy also reached Bryant Fong and Roger Wyse, the two other former managing directors who, along with Hanham, brought the alleged misconduct to the LPs’ attention. Both men declined to comment. Neither Wyse nor Fong are plaintiffs in Hanham’s complaint, nor have they filed suit against Burrill.
The revelations come six months after Xconomy reported that Burrill’s latest fund, his fourth, fell well short of the $505 million mark Burrill had originally announced. At $200 million, the fund is also no longer under Burrill’s control. He transferred his ownership stake in the fund late last year to a new entity called Biomark Capital, run by former Burrill colleagues, as Xconomy reported.
Since then, Burrill & Co. has morphed into Burrill Equities, which runs the venture funds Burrill raised prior to Funds III and IV, and Burrill Media, which still plans to publish the upcoming annual state-of-the-industry book, according to Burrill’s spokeswoman.
With Burrill removed from Fund III, Hanham, Wyse, and Fong are now temporary stewards of the fund, working under the name BAR Capital. Fong is also involved in Biomark. At the head of Biomark’s is David Wetherell, who joined Burrill in 2011 from his own venture firm GBP Capital. At the time of the split with Wetherell in late 2013, Burrill told Xconomy that the firm was “right-sizing.”
