Percussionaire, former CEO trade legal blows

SANDPOINT — A cloud of litigation is forming around the departure of Percussionaire Corp. president and CEO Dr. Adel Bougatef and both sides are coming out swinging.

The Sagle respirator manufacturer is accusing Bougatef of attempting to weaken Percussionaire and using its resources to lay the groundwork to form a rival company.

Bougatef’s counsel, however, contends his client was dismissed after bringing to light accounting errors and irregularities.

An eight-count counterclaim is being drawn up in response to Percussionaire’s civil complaint, according to Chicago attorney Hank Marino.

Percussionaire struck first with a 21-page complaint filed on May 26. It accuses Bougatef of breach of contract, fiduciary duty and the Uniform Trade Secrets Act, in addition to tortious interference of a contract and conversion.

Bougatef’s wife, Marleen De Heyn, is also named as a defendant in the suit. She was an independent commissioned coordinator for sales of Percussionaire products to distributors in Europe, according to the suit.

Percussionaire manufactures intrapulmonary percussive ventilation devices invented by Dr. Forrest Bird, who founded the company.

Bird is described in court documents as a mentor to Bougatef in the field of  intrapulmonary percussive ventilation. As a result, Bougatef gained authority and stature in the field, the suit states.

Bougatef was the chief of a Brussels, Belgium, neonatal unit when Bird personally selected him to handle Percussionaire’s day-to-day operations in January 2012.

Bougatef’s duties included developing the company’s budget and expanding its line of products and market share so it could eventually be sold, the suit said. Bougatef was also tasked with ensuring that Percussionaire products stayed current with safety certifications of Underwriters Laboratories and its European counterpart, Conformité Européenne.

The suit alleges Bougatef secretly worked with a company in Ireland to design a new range of ventilators based on Bird’s patented technology. It further alleges that Bougatef used company funding to finance the construction of a prototype and used its research-and-development staff to design a monitoring device, which was also based on Bird’s technology.

“The purpose of the secretive product development was in furtherance of Dr. Bougatef’s own business plan to acquire Percussionaire for a low price and to utilize the new product to the advantage of a new company, or, alternatively, to start a new competing company in Texas after crippling Percussionaire,” the company’s attorney, C. Matthew Andersen, said in the suit.

Bougatef, the suit said, was fired by the board last year, but Bougatef countered that the board’s concerns were the result of language barriers and misunderstandings. Bougatef was ultimately allowed to resign, but stayed on as transitional-period consultant.

It was subsequently discovered that the company had been warned repeatedly that its ability to sell Percussionaire devices in Europe was in jeopardy, according to the suit.

The company also discovered that its funds were used to hire an attorney to probe patents for weaknesses, the suit said. It also alleges that computer files were removed, proprietary drawings were scanned to an off-site computer and other important records were being withheld.

Marino, Bougatef’s defense counsel, said his client vigorously denies the allegations raised in Percussionaire’s complaint. He said his client and accounting personnel were fired after they reported to the board of directors material accounting errors and irregularities that occurred prior to Bougatef’s hiring.

“There is a different side to the story,” Marino said on Tuesday. “They have their side and we have ours.”