James Parker, former chief financial officer for marijuana company MedMen, has come forward with new allegations of wrongdoing against his former employer by adding two more causes of action to the breach of contract lawsuit he filed back in January.
The California-based vertically integrated cannabis company called the lawsuit “baseless” and the allegations “meritless.”
Parker, for his part, now says he should be entitled to additional compensation because, under the terms of his employment agreement, he claims he was guaranteed 4.2 million “full value long term incentive plan units,” or equity grants in the company, that would vest over time.
The total he was promised, Parker alleges, was worth $17.5 million in cash. But, according to the updated suit, he was denied any of those benefits after being terminated in November. He is now seeking restitution.
Parker also now claims that in November MedMen illegally converted many of the promised incentive-plan units into stock – which then were worth about $25 million based on the company’s stock price, the suit alleges – and is refusing to return the holdings.
Perhaps the more salacious new allegation is that MedMen CEO Adam Bierman, President Andrew Modlin and Chairman of the Board Ben Rose conspired to engage in a short-term stock manipulation scheme that netted them “millions of additional dollars.”
Parker pointed in the suit to the January hiring of digital agency Winning Media for $200,000.
“Winning Media previously had been widely reported in the press to have been implicated in several ‘pump and dump’ schemes where, for a price, it would help drive-up share prices for a limited period of time,” the lawsuit motion reads. “Rose, Bierman and Modlin knew or should have known that Plaintiff would have strenuously objected to the retention of a company like Winning Media.”
Winning Media then went on a PR blitz that helped drive up MedMen’s stock price before the OTC Markets Group began looking into the agency’s work on behalf of the company, the suit alleges. At that point, all promotional efforts ceased, and MedMen tried to distance itself from Winning Media, the suit says.
While defending itself over the Winning Media story in early March, MedMen said none of its company officers had sold any stock in the previous 90 days.
But according to Parker’s updated lawsuit, “what MedMen Enterprises, Inc. did not disclose was that the General Partners (including Chairman Rose, CEO Bierman and President Modlin) all had financially benefited from the run-up in stock price to the tune of millions of dollars each, using public company money to fund the Winning Media engagement, and to the direct detriment of their private equity limited partners/investors.”
A MedMen spokeswoman wrote in a statement emailed to Marijuana Business Daily: “As we’ve said in the past, this is a baseless lawsuit for Parker’s financial gain, and we will continue to vigorously defend ourselves in court. We will not be distracted by these meritless allegations.”
Published at Fri, 03 May 2019 22:03:41 +0000