Raleigh drone startup PrecisionHawk sued for ‘breach of contract, unfair and deceptive trade practices’

RALEIGH — PrecisionHawk, a Triangle-based drone technology company, is being sued by JP Business Group and Terravative for nine breaches of contract and “unfair and deceptive trade practices.”

The lawsuit, filed earlier this month in Wake County North Carolina Superior Court by the law firm of Thomas K. Lindgren, pertains to a 2015 agreement that saw PrecisionHawk acquire Terraserver.com and other assets from the plaintiffs.

The lawsuit claims that Raleigh-based PrecisionHawk was required to generate and pay commissions to the plaintiffs for six years on the sales of commissionable products and services through Terraserver.com and all other PrecisionHawk sales channels.

That included products and services that utilized satellite data in any manner, terrain data, elevation data, digital terrain models, and digital surface models.

The plaintiffs allege, among other things, that PrecisionHawk deliberately misclassified sales data, under reported, and under paid commissions, neglected their obligations to market and sell certain commissionable products, and withheld information to conceal their breaches of contract.

“It’s disappointing and frustrating anytime a business fails to follow through on their promises, but even more so with PrecisionHawk as they had an exceptional founding team that I believed in and trusted to follow through on the promises they made,” said JP Business Group’s managing partner, James Burns, in a statement.

“Unfortunately, the founding CEO was replaced within months after our deal and PrecisionHawk is now on its 4th CEO in the last five years. We tried for more than six months to resolve the issues directly with PrecisionHawk but were unable to reach a resolution which has forced us to file this lawsuit.”

He added: “I’m hopeful that PrecisionHawk will now dedicate proper time and attention to this matter so that we can reach an amicable resolution and avoid a multiple-year court battle, but we are willing and prepared to go to trial as needed to obtain a fair outcome.”

When contacted by WRAL TechWire, PrecisionHawk responded with a one-sentence statetment: i”We have fulfilled our contractual obligations to JP Business Group and look forward to the opportunity to demonstrate that in court.”

Founded in 2010, PrecisionHawk is one of the fastest-growing drone tech startups in the Triangle.

Last December, it raised a $32 million investment from venture investors including Millennium Technology Value Partners, Third Point Ventures, Eastward Capital Partners, and others. The round brings PrecisionHawks financing so far to more than $100 million.

Its CEO at the time, Michael Chasen, said the company had 100 percent year-over-year growth for the last two years. A month later, veteran executive James Norrod replaced Chasen as chief executive.

Chasen now leads the advisory board for PrecisionHawk. He is also chair of the FAA Drone Advisory Committee.