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Truth Squad: Shri Thanedar deflects blame for dire stories on lab animals

The face of Shri Thanedar ‒ scientist, entrepreneur and one of four Democratic candidates for Michigan governor ‒ is becoming familiar to voters thanks to more than $1.2 million in TV ads bankrolled by part of the $6 million he has donated to his campaign. It’s been enough to put him in a slight lead over former Senate Minority Leader Gretchen Whitmer in a recent poll by the Detroit Regional Chamber.

Related: Truth Squad rating categories
Related Truth Squad: Thanedar vows to stop for-profit charters, DeVos

But Thanedar has come under unflattering scrutiny for reports that in 2010 a New Jersey pharmaceutical firm he owned that went bankrupt allegedly abandoned scores of research animals, which had to be rescued by animal welfare groups. A typical headline: “Shri Thanedar's company abandoned more than 170 dogs and monkeys.”

Thanedar has labeled the accusations a media smear and blames the  creditor in the bankruptcy for whatever unpleasantness lab animals’ went through at the time.

The reports amount to a character test: What responsibility does Thanedar bear for what happened to hapless test animals at the lab? And is there support for his statement that he’s the victim of a smear campaign?  

Truth Squad finds Thanedar’s efforts to deflect responsibility for the animals to be unsupported, and award a rating of False.  

The claim:

Thanedar says he tried to step in to protect the animals during bankruptcy and called media accounts “all a misreporting just to smear me.” Referring to a creditor in federal bankruptcy proceedings, he stated in a TV interview where he believes the blame rests: “This is Bank of America. Not my fault.”

The facts:

Thanedar’s rags-to-riches profile, which began in poverty in India, includes the making of a fortune, its sudden loss, and a second rise to wealth. After completing post-doctoral work at the University of Michigan in the early 1980s, he built a prosperous chemical firm in Missouri, then borrowed $24 million to acquire several other firms.

But the Great Recession took its toll. In 2010, creditor Bank of America, seeking to recoup $23 million in debt, seized a group of businesses that included AniClin Preclinical Services in New Jersey. Thanedar got back on his feet with the Ann Arbor chemical firm Avomeen in 2010. (Last year, he was hit with a lawsuit alleging he made “fraudulent and misleading” claims to inflate the value of Avomeen, which he sold for about $20 million.)

By the spring of 2010, AniClin in New Jersey was shuttered, as lawyers for Bank of America and Thanedar jousted in Missouri bankruptcy court over how to dispense with its assets. That included 118 beagles and 55 monkeys housed as medical research test animals.

Thanedar said the animals were used to test medications for heart disease and other ailments as required by the U.S. Food and Drug Administration. It’s not entirely clear how many people were designated to care for the animals after the lab closed and a receiver took control of the facilities.

In June 2010, lawyers for Thanedar sought to block a motion by the receiver to have the lab’s dogs and monkeys placed in “animal sanctuaries for no compensation.” His lawyers argued “the value of the animals could have a range of between $189,000 and $445,000. The Motion does not indicate whether Receiver has taken any action to sell the animals (i.e. to another testing facility) for the benefit of the creditors.”

Three weeks later, the bankruptcy judge ordered the animals placed in sanctuaries. The order noted that the objection to the motion by Thanedar’s attorneys had been withdrawn.

On July 4, 2010, rescue organizations, including New York State-based Pets Alive, can be seen on video releasing the beagles from their cages to enjoy the outdoors. A California-based group, In Defense of Animals, eventually placed the monkeys in sanctuaries around the country.

Betsy Tegze, executive director of Pets Alive, told Truth Squad: “They were not in horrible condition. I’ve seen animals in way worse condition. We have been told that staff at the time was jumping over fences and feeding them.”

She added that the dogs were nervous and withdrawn at their release, as if afraid to walk on grass, behavior that is typical of test animals.

“They had never been outside. They didn’t know what fresh air was, what sunshine is.”

In previously undisclosed court testimony obtained by Truth Squad, Daniel Dooley, CEO of bankruptcy receiver Morris-Anderson & Associates, offered a grimmer portrait, saying AniClin “was in incredibly bad shape” just before it went into receivership.

“We had monkeys and beagles, dogs, that were starving. We actually ‒ before we were authorized as receiver, I would personally put up money in our own pocket to feed the animals so that they didn't starve…Employees hadn't been paid for some period of time. Benefits hadn't been paid. It was a bloody mess at AniClin.”

In another newly discovered court record supporting release of the animals, Bank of America told the court it had repeatedly offered AniClin the opportunity to continue to care for the animals and oversee their subsequent placement during bankruptcy, all at the bank’s expense.

The bank said AniClin “ignored” Bank of America’s offers, leaving the bank  no choice but to put the animals’ care in the hands of the receiver.

Contacted by Truth Squad, Thanedar said through his campaign: “To my knowledge, no such offer was ever received. My company, not the bank, paid the salaries of the animal care workers and paid for food and supplies for the facilities after receivership."

On the Dooley testimony that the animals were “starving,” Thanedar stated: "To my knowledge, Mr. Dooley did not visit the AniClin facility prior to the receivership taking over, so I do not understand how he can make such a statement."

He added that “all of the animals were saved, cared for and taken to animal shelters thanks to the tireless efforts of animal care organizations, activists and others involved. As a business owner and candidate for governor, I know that the ultimate responsibility for any organization ‒ whether it's running a business or leading a state government ‒ begins and ends with me, and I take that responsibility seriously…”

Shri Thanedar
Responsibility for abandoned lab animals

Thanedar can credibly state he was not involved in day-to-day operations at AniClin, especially after it was closed during bankruptcy proceedings. But his statement that the allegations have been misreported and that Bank of America is to blame do not square with the record. Indeed, according to Bank of America court filings, AniClin did not respond to its offer for the lab to continue to care for the animals and try to place them with other labs, at the bank’s expense, during bankruptcy.

Thanedar insists the animals were not mistreated, a stance that appears to be supported by an animal rescue group but challenged by Dooley, the receiver CEO.

Court records also show Thanedar’s attorneys initially tried to block efforts to release the animals to sanctuaries so his business could try and sell the beagles and monkeys to other labs, reducing its bank debt.

That is certainly within their right; indeed, it can be argued Thanedar’s lawyers would not be doing their jobs if they weren’t trying everything possible to reduce what the failed lab owed the bank. But the fact remains that the court challenge likely had the effect of delaying the animals’ release from less-than-optimal living conditions.

The questions Thanedar faces regarding his treatment of the lab animals are not the product of “misreporting to smear” his candidacy for governor. The bankruptcy filings offer a clear, contemporaneous account of that chaotic period. Nor does it appear from the record that Bank of America did anything to place the animals in jeopardy.

Thanedar’s statements seeking to deflect blame are rated False.  

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