Former Photizo Employees Continue to Battle for Alleged Unpaid Wages

The  case of Photizo Group, the former provider of MPS and predictive analytics solutions, continues, with several former employees continuing to fight for alleged unpaid wages in civil court.

Background

By 2017, Photizo Group, which was located in Lexington, Kentucky, was struggling with debt. In August 2017, its senior secured creditor, venture-capital firm Meritus Ventures, repossessed Photizo assets and sold them to Virtulytix Inc., a company just then formed by Photizo CEO Edward Crowley and other Photizo employees. As part of its purchase, Virtulytix would assume Photizo’s debt owed to Meritus Ventures, which was approximately $4 million. Among the assets sold to Virtulytix was Photizo’s predictive analytics division.

At the time, Meritus stated that Photizo’s unsecured creditors would not be paid any part of the proceeds received from the liquidation of Photizo assets, because it said those assets were not worth more than Photizo’s $4 million debt to Meritus.

Subsequently in 2017, several Photizo employees, who alleged that Photizo owed them unpaid wages, contacted the Kentucky Labor Cabinet, which then demanded that Photizo pay the wages. However, some but not all of the wages were paid to the employees. The Kentucky Labor Cabinet then fined Photizo and filed a civil lawsuit against Photizo.

February 2020 Lawsuit

By 2020, however, several former Photizo employees stated they had still not received wages due to them, and in February 2020, filed a lawsuit against Photizo Group, Edward Crowley, Meritus Ventures, and a legal advisor, Ray Moncrief, demanding payment of the alleged unpaid wages, which are said to total $328,197.20.

The lawsuit contends that these defendants are legally liable for the unpaid wages, that each defendant has employer status under the Kentucky Wage and Hour Act, and that they therefore are liable for the unpaid wages. The suit contends that Meritus and Moncrief had substantial influence over the Photizo payroll, and substantial control over Photizo itself, qualifying them as employers. It alleges that both Meritus and Moncrief directed that any cash infusions to Photizo not be used to pay unpaid wages.

Additionally, the suit alleges that Meritus and Moncrief urged the transfer of assets to the new company, Virtulytix, in order to extinguish Photizo’s unsecured debts, including unpaid wages.

In sum, the employees’ lawsuit argues that judgement against the defendants would not only protect the wages of the former Photizo employees, but “send a powerful message to other would-be financiers across the state who attempt to shutter a business so as to avoid paying the earned wages of Kentucky employees.”

Currently, the court has scheduled mediation for the case, and has not set a trial date.

Stay tuned, as we will continue to provide any updates on the case.