Milestone Investments LLP, an early angel investor in MedMen, has filed an official complaint against co-founders Adam Bierman and Andrew Modlin as well as current Chief Strategy Officer Christopher Ganan that could see the executives forced to forfeit their homes, according to a Law360 report.
The trio reportedly offered their Los Angeles, California mansions as collateral on a $10.2 million loan. The Alaskan investment firm also loaned the executives $2 million for the purpose of purchasing 4.6 million shares of MedMen stock. The loan was granted on the condition that proceeds from selling the stock would go to paying back the loan.
In the official complaint Milestone Investments LP v. Ganan et al., Milestone asserts that they do not believe the men have any intention of paying off the loans.
Their luxurious homes were put up against the loan in December 2019 as the distribution chain began to crumble; Modlin had very publicly purchased a mansion in the Hollywood Hills the previous summer.
Within 15 days of executing the loan, Milestone claims that they repeatedly asked for the deeds of trust. The three men were sent notices of default by Milestone on March 26 but Modlin had sold his WeHo mansion to a YouTuber just six days prior for a meager profit.
Currently, only Ganan has complied with the request. Milestone Investments is seeking a court order requiring the men to surrender the deeds, sell off the shares they had purchased, and pay back the $2 million loan they used to acquire them.
In January 2020, MedMen informed many cannabis producers and growers that they wouldn’t be able to pay their invoices. Weeks after that development, Bierman stepped down as CEO — at this time, Bierman and Modlin both gave up their super shares, leaving each with just a 5% stake in the corporation.