Weedweek report…. An investor who guess $5M on outstanding California model Bloom Farms, is suing its parent company. He alleges it engaged in a “pattern of fraudulent misrepresentation and concealments.”
According to the Delaware lawsuit, American General Resources (AGR) mentioned it might obtain constructive, rising internet revenue beginning in November 2019.
Within 30 days of the June 2019 funding, plaintiff Jeff Menashe claims the corporate revised down earlier internet revenue and pushed again its constructive internet revenue goal to May 2020. Menashe is CEO of monetary agency Demeter Group.
At the time of funding, Menashe says he wasn’t conscious a “federal securities fraud case was brewing” towards then-AGR CFO Ronald Roach. Roach subsequently pleaded guilty to 2 counts of fraud in a “solar energy Ponzi scheme,” unrelated to Bloom, which value traders and the U.S. Government $1B.
- Plaintiffs “became concerned about the extent to which foul play or fraud might explain the reasons for AGR’s claiming insolvency a mere 34 days after closing the financing” in This autumn 2019.
- AGR, in keeping with the lawsuit, has “steadfastly refused to have an independent third-party audit,” and is pursuing a Series E financing.
- The go well with alleges that the corporate “continues to fail woefully in observing basic principles of corporate governance.”
- A spokesman for Bloom Farms declined to touch upon the plaintiffs “unfounded” claims, and mentioned the corporate will “vigorously” defend itself.