Fruit Slabs Famous Feuds - A Cannabis Law Series by Brandon Dorsky
FRUIT SLABS FAMOUS FEUDS
On Fruit Slabs Famous Feuds, CEO, Brandon Dorsky, Esq., a cannabis and entertainment industry attorney when he’s not commander in chief of the SLABS army, dishes his opinions on the latest and greatest in cannabis industry litigation matters.
This week’s news is both real and sticky.
On March 15, 2022, Reid Drescher, cousin of “The Nanny” star Fran Drescher and husband to Aviva Drescher of The Real Housewives of New York City, was named in a lawsuit filed in New York State court alleging he fraudulently misrepresented having over $5 million dollars to purchase a cannabis company.
P&S Ventures, LLC, a California based company, sued Drescher and his consortium of companies, Cape One Management, LLC, Gateway Privileged Fund, LLC, Hudsieu Harver LLC and Spencer Clarke LLC, claiming Drescher lied when he touted to have enough money to buy-out a co-founder and relationships with celebrities that would propel the business to the next level. The complaint asserted counts of fraudulent inducement, breach of contract and breach of fiduciary duties.
P&S, in reliance on Drescher’s representations, did not engage other investment groups and entered into an agreement to sell portions of their interests to Drescher’s companies, however P&S alleges Gateway and Drescher were in default “before the ink on the parties’ contracts were dry.” According to sources, defaults began as early as the second scheduled payment and the defendants default led P&S into a receivership that lasted just under two years. Defendants access to celebrity power, much like the promised funds, allegedly fell short of the representations that were made, perhaps because it was really the ladies in his life that were the plug.
Only $1.3 million of the promised $5.4 million had been received as of the filing of the complaint. The complaint alleges that, upon coming out of receivership, Drescher tried to block a new investor from funding the deficit created by his default by refusing to grant approval unless his companies’ capital contribution was returned in full, amongst other unreasonable demands. The complaint seeks to have the agreement between the parties rescinded, in addition to damages and attorney’s fees.
The case is P&S Ventures LLC v. Gateway Privileged Fund LLC et al., case number 651186, in the Supreme Court of the State of New York, County of New York.
Further South on the East Coast, Scooter Braun connected blank-check SPAC Parallel found its name in court documents when a trio of investors accused Parallel and its former CEO, heir to Wrigley chewing gum fortune, of securities fraud and other claims. Scooter Braun was not named in the lawsuit. The highly redacted complaint filed in Florida federal court, alleged that William “Beau” Wrigley Jr. and Parallel “offered a litany of false and misleading statements and omissions” prior to the shareholders funding an undisclosed investment. TradeInvest and First Ocean allege that their simple agreement for future equity, or SAFE, was a ruse and was induced from misrepresentations by Parallel and Wrigley Jr. The complaint accuses Wrigley Jr. of transferring funds to entities wholly controlled by him and for his material benefit and that he let the SPAC deal “die on the vine (or even orchestrated it so the transaction would never close.”
After receiving funds on September 27th, Parallel sent an e-mail to investors on behalf of Wrigley on October 1st, explaining that it was no longer pursuing the SPAC transaction that the funds had been raised for. As the situation began to get stickier, Wrigley resigned as CEO of Parallel in November. Wrigley is also named in a complaint that was filed in New York State court on Thursday, where Techview Investments and other lenders claim they are trying to thwart a self-dealing scheme by Wrigley.
The Florida case is TradeInvest Asset Management Co. (BVI) Ltd. et al. v. William “Beau” Wrigley Jr. et al., case number 9:22-cv 80360 in the U.S. District Court for the Southern District of Florida.
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