Cultivated meat startup GOOD Meat has upped the ante in its increasingly ugly legal dispute with bioreactor specialist ABEC over alleged nonpayment of bills. GOOD has filed a series of counterclaims alleging that ABEC breached the terms of their contract and that GOOD Meat is in fact the wronged party.
ABEC, which had been working with GOOD Meat on pilot cultivated chicken facilities in California and Singapore, signed an agreement with the startup in August 2021. Under the seven-year deal, ABEC would design, manufacture, install and commission multiple 250,000-liter vessels— “the largest known bioreactors for avian and mammalian cell culture”—for a large-scale facility in the US with the capacity to produce up to 30 million pounds of meat.
Given “financing hurdles,” by November 2022, Eat Just/GOOD Meat “recommended the evaluation of a phased approach, creating five 125,000-L bioreactors instead of four 250,000-L bioreactors,” and the two started corresponding over amendments to their agreement.
By March 2023, ABEC said it had had no choice but to take legal action over unpaid bills in a complaint decrying “repeated failures and broken promises” from GOOD Meat/Eat Just: “Although ABEC has delivered on all of its commitments… defendants have failed to live up to their financial obligations.”
GOOD Meat to ABEC: You breached the contract
In court filings from January 18, 2024, however, GOOD Meat and Eat Just argued that they had paid ABEC for various items including bioreactors, piping, and heat exchangers, which had not been delivered, adding: “ABEC has breached its obligations under the agreement by failing to deliver property to GOOD Meat.”
They went on to claim that ABEC filed its lawsuit while the parties were still negotiating an amendment to their agreement.
“This action was initiated during ongoing efforts between ABEC and GOOD Meat to negotiate an amendment to the bioreactor development agreement… ABEC filed suit… attempting to enforce terms that were still under negotiation… The amendments [to the agreement, as defined by ABEC], therefore, are not validly executed or binding.”
GOOD Meat further accused ABEC of breaching the parties’ original agreement by talking to “multiple competitor cultivated meat companies” about supplying them with 25,000-L+ bioreactors, despite having agreed that GOOD Meat would have exclusivity until the pair had reached the latter stages of their project or one year had passed since the agreement was terminated.
According to GOOD Meat: “The agreement had not been terminated for one year when ABEC reached out to these companies. In fact, to this day, the agreement has not been terminated for one year. Accordingly, ABEC violated the exclusivity provision of the agreement.”
Email exchanges between the warring parties included as exhibits in the litigation reveal the steady deterioration of their relationship, with GOOD Meat’s CFO telling ABEC’s CFO in early February 2023 that “It is my understanding that the agreement is pending legal review and until that is sorted out, we are holding.”
ABEC’s CFO forwarded the message to his CEO, Scott Pickering, with the comment: “WTF.”
Pickering then emailed GOOD Meat/Eat Just CEO Josh Tetrick: “Your CFO just notified my CFO that GOOD [Meat] has decided to stop all payments. I hope this is miscommunication within your team. Please resolve immediately … This continues to be unnecessarily difficult.”
A month later, ABEC filed suit, arguing that it had “no choice but to terminate the large-scale bioreactor development and manufacturing agreement and associated purchase orders…and to seek to recover its damages.”
Legal expert: ABEC will have to choose between two really bad options
ABEC—which claims it is owed $100 million in cash and stock for work done for Eat Just— will ultimately have to choose between “two really bad options,” predicts one legal expert.
“One option is to try to litigate and win where the result is a win against a company that is bankrupt and/or has no money,” said Dale Giali, partner at law firm King & Spalding, which is not representing either party.
“The alternative is to take a really slimmed down settlement and move on.”
ABEC and Eat Just—which told the publication Green Queen in November that it hopes to break even in 2024—are not commenting on the litigation.