trending Market Intelligence /marketintelligence/en/news-insights/trending/gBPhxP0TOrgS97D0c1nPKw2 content esgSubNav
In This List

MiMedx accused of investor fraud in lawsuit

Blog

Highlighting the Top Regional Aftermarket Research Brokers by Sector Coverage

Video

COVID-19 Impact & Recovery: Healthcare Outlook for H2 2021

Blog

Corporate Credit Risk Trends in Developing Markets: A Loss Given Default (LGD) Perspective

Blog

Corporate Credit Risk Trends in Developing Markets: A Probability of Default Perspective


MiMedx accused of investor fraud in lawsuit

A lawsuit against MiMedx Group Inc. is alleging the company overstated its revenue figures over several years.

Halunen Law, on behalf of former MiMedx employees Jess Kruchoski and Luke Tornquist, filed a whistleblower lawsuit against the company and its CEO in the federal district court in Minneapolis.

The lawsuit claims MiMedx engaged in channel stuffing by booking large orders for the EpiFix product even though it was never requested by its customers: veteran hospitals in the Upper Midwest. The channel stuffing usually occurred sometime before the company was to issue its quarterly reports to artificially inflate revenue figures, the lawsuit added.

"When two top company sales people objected to being part of what they perceived to be a scheme to defraud shareholders and the investing public, senior-level executives retaliated with threats, intimidation, and ultimately, termination," Halunen Law said.

However, MiMedx said the lawsuit was "frivolous" and "meritless," adding that it terminated both employees and filed lawsuits against them after they were found to have breached their contractual obligations to the company.

"[W]e found out that these two individuals had been selling competitive products and other products for over a year into our accounts," MiMedx Chairman and CEO Parker Petit said in a statement. "It is my opinion that this situation developed because these two individuals wished to leave our employment and force us into waiving their non-competition obligations."