Ashley Kalus and Husband Fight Breach of Contract Allegations in Illinois
PROVIDENCE — Republican gubernatorial candidate Ashley Kalus is facing allegations that she bounced a paycheck and cheated on the chief operating officer of Adhereon, an Illinois-based company that sought to market breast implants, on a salary of $125,000 and even more in stock.
A lawsuit filed in Chicago pits Kalus and her husband, plastic surgeon Dr. Jeffrey Weinzweig, against former COO of Adhereon, Kelley Folino, who was Kalus’ boss when they both worked for the governor of Illinois. , Bruce Rauner.
He accuses the Weinzweigs of “common law fraud” and essentially torpedoing Adhereon as part of an “eviction plan” to avoid depriving Folino of the assets it helped bring to market.
“Company is bankrupt. End of story. End of business. End of friendship,” Kalus reportedly wrote to Folino on March 14, 2018, before the dispute escalated into a breach of contract lawsuit.
As recently as March 31, 2022, Kalus identified herself as CEO of Adhereon and her husband as CEO of Novaplast in a filing with the Rhode Island Ethics Commission.
The campaign rejects the validity of the lawsuit
“The lawsuit is without merit,” Kalus campaign spokesman Matt Hanrahan wrote in response to a Journal request for comment. “This case has been dismissed twice previously, and a Motion to Dismiss will be filed shortly to again dispose of Plaintiff’s recently filed Amended Complaint.”
Scott Lucas, Folino’s attorney, notes that the first time the case was dropped was at Folino’s request, to change locations.
In a filing Aug. 1 as Kalus campaigned for governor of Rhode Island, his attorneys in Chicago wrote that Folino’s lawsuit was “littered with generic, vague, and conclusive allegations” against “Ashley, Jeffrey, Novaplast and… [Weinzweig’s] JW plastic surgery.”
They also argued that the Weinzweigs – Ashley and Jeffrey – cannot be held personally liable for the alleged breach of a “supposed oral equity contract” because “Adhereon was never properly organized and therefore did not exist”.
A judge at least partially agreed, dismissing the lawsuit, but Folino filed an amended complaint.
On Monday, Kalus’ attorney filed this response to Folino’s latest offer for a hearing on why Kalus should not be held in contempt.
“Thus, Folino has made clear his intention to impact the gubernatorial race in Rhode Island with the July 21 order, which Folino says can now be used against Ashley’s campaign treasurer to “freeze all assets,” Kalus’ response said.
“Folino is completely out of control, and this Court should take steps to ensure that she is not able to cause permanent damage to this Court, to Ashley’s campaign or to the voters of Rhode Island.”
Ashley Kalus:The GOP gubernatorial candidate releases some of her tax returns. What do they say?
What happened to Kalus’ business?
The legal dispute revolves around plastic surgery and bone reconstruction technology that Weinzweig developed years earlier while working at the University of Massachusetts at Lowell.
After earning a master’s degree, Kalus joined her husband in Illinois, where he was starting a new plastic surgery practice.
She also became involved in politics and worked on Republican Rauner’s campaign, as did Folino.
When Rauner took office in 2015, he hired Folino as deputy chief of staff and Kalus as director of public engagement. The two women have become friends.
In 2016, Kalus left state government and, according to the lawsuit, “aggressively recruited” Folino to go into business by helping to market breast implants developed by Weinzweig and selling “products and branded silicone materials used for scar treatment”.
The startup formed to do the job was Adhereon, and on August 1, 2017, after Folino’s employment with the Illinois Department of Commerce ended, “and building on the promises and incentives that Ashley made on behalf of Adhereon,” the lawsuit states, “Kelley decided not to pursue other employment opportunities and began working full-time on Adhereon’s development.”
The business agreement between Folino and the Weinzweigs was verbal and never codified in a written contract.
Folino was originally to have the role of CEO, but that was changed to COO and co-founder, according to the complaint, which said she was to be paid 26.6% of Adhereon’s common stock and, once a number of scar treatments were sold, a salary of $125,000 per year.
But after Kalus and Folino worked together through 2017 to get Adhereon off the ground, by early 2018 things had started to go downhill.
Governors Forum:McKee and Kalus paint Rhode Island in stark contrasts at Journal debate, Public’s Radio
‘…the reality is that we cannot pay the salaries…’
As Folino tried to schedule meetings to have stock issued in February 2018, a $7,000 paycheck to Folino, just the second she received from Adhereon, bounced, according to the lawsuit.
Then, on March 13, Kalus wrote “the business is in worse shape than expected…the reality is that we cannot pay salaries and are unable to personally loan more money to company,” according to the complaint. “I know this might not be what you expected.”
The next day, Folino and Kalus met for breakfast, and Kalus declared Adhereon insolvent. “Ashley stormed out after Kelley reminded her that Kelley had earned shares in the business and was entitled to the promised salary,” the complaint states.
After Folino was cut off from the company’s mail server, Kalus texted: “Company is bankrupt. End of story. End of business. End of friendship.”
“The Weinzweigs’ actions were designed and intended by the Weinzweigs to bring Kelley out of Adhereon by … excluding Kelley from participating as a member of management and as a shareholder of Adhereon and … causing financial hardship to Kelley by denying her past and future salaries and her share of Adhereon’s value and distributions,” the complaint states.
Folino sued for breach of contract in May 2018, and the case has since turned around.
The Illinois Secretary of State’s corporate database lists Adhereon as dissolved.
The Weinzweigs argued that there were virtually no assets left in Adhereon and that the licenses to commercialize the patents developed by UMass were held by Novaplast, which they controlled.
This summer, Judge Allen Price Walker denied a request by Folino to place Adhereon’s assets in receivership, but ordered the Weinzweigs not to transfer any assets “other than in the ordinary course of business.”
Folino is currently chief of staff at the Paulson Institute, a think tank founded by former US Treasury Secretary Henry Paulson.
On Twitter: @PatrickAnderso_
Campaign reports:After the money in the RI gubernatorial race