NuVeda Files for Bankruptcy after Ivey Investment
Marijuana dispensaries are all the rage. In 2020, Nevada joined a growing number of states that legalized the sale and taxation of marijuana for recreational use. Poker pro and businessman Phil Ivey is not one to allow a business opportunity to pass by, so he eyed the new market.
He invested in it.
It appears, however, that he did so with the wrong people. The company, NuVeda, is now in the midst of filing for bankruptcy. And Ivey is none too happy about it.
Ivey Retains Lawyers
It is no surprise that Phil Ivey has lawyers on tap, ready to step in when situations arise. He needed them in the last few years to handle some baccarat cases. Casinos had accused Ivey of cheating to win millions of dollars, and he countersued. He took his London case all the way to the UK Supreme Court but still lost. And his baccarat case pertaining to the Borgata in Atlantic City finally ended in 2020 with an apparent off-the-record settlement.
So, when the current investment situation went awry, Ivey called upon his lawyers.
Apparently, according to PokerNews, Ivey invested in a company called NuVeda LLC. The Las Vegas-based company claimed to offer “natural medicinal solutions.” (In other words, it was a cannabis dispensary. In even simpler terms, it was legal weed.) Its incorporation date was in 2014, but it didn’t assign officers until four years later.
Back in 2014, Ivey gave NuVeda a line of credit in the area of $1.9M. That money represented a 3% equity share in the company. His association with the company also provided some legitimacy and “proof of financial viability.” Nevada did approve the company’s request for licenses – six of them – to operate in the state, and Ivey was listed as a partial owner.
Ivey wasn’t the only investor. Another named Shane Terry was supposed to be a 22.8% owner of the company, but instead of NuVeda paying him the $1.75M that was worth, they paid him $250K. And two of the company’s owners – Pejman Bady and Pouya Mohajer – took shares promised to Ivey and Terry for themselves. They did this by creating a new entity called CWNevada.
An affiliate of marijuana dispensary chain Urbn Leaf sued cannabis company NuVeda LLC and its founders in Delaware, seeking the return of $5 million it paid for an ownership stake in a deal that hit snags when Nevada regulators suspended approvals.https://t.co/sQ8G9sB5vU
— Mike Leonard (@Mike_S_Leonard) August 17, 2020
Complicated Case
Terry, Ivey, and a person named Dotan Melech sued NuVeda. The Nevada Supreme Court called it a “complex business dispute.” The case itself didn’t make it to the state’s highest court, but a petition to change judges did.
The complications of the case arose from NuVeda working with CWNevada to dissolve companies containing investments from Ivey and Terry and then reestablish those companies. This action violated a court order, and the judge in the case cited NuVeda and CWNevada for contempt. That contempt hearing happened in early 2021 (after numerous rescheduling per NuVeda), but NuVeda opposed Judge Elizabeth Gonzalez presiding over the hearing.
This was the case that rose to the level of the Nevada Supreme Court. That court found that NuVeda allowed 37 days to pass without requesting a judicial change. In sum, it was not a timely and proper motion. That allowed the district court-level case to proceed as of April 2021.
From the filings readily available from the courts, it appears that Terry’s claims were dismissed in March 2022.
Earlier Complications and Revocations
Meanwhile, CWNevada lost six of its 14 cannabis-related licenses in 2020. The Nevada Cannabis Compliance Board revoked those licenses and issued penalties to the tune of $1.25M.
The company fell behind on tax payments in 2018, prompting an investigation. That investigation led to a slew of complaints, including:
-illegally moving marijuana without proper video surveillance
-inaccuracies in records for Nevada’s seed-to-sale tracking system
-selling 1,793 products without a certificate of analysis
-growing more than 4,100 marijuana plants not registered with the state
-destroying all untagged marijuana and associated products
-owing back taxes to Nevada of more than $1.5M
A court ordered CWNevada to sell its remaining eight licenses to help pay the company’s debts. One of those debts was a former judgment against CWNevada to pay a consultant $4.9M. CWNevada then filed for bankruptcy in April 2019, seeking relief and a chance to reorganize its business.
Nevada Labor Commissioner’s office said #CWNevada owes employee wages totaling $35,198. Vendors, investors & partner Nuveda say they are owed money too. Claims on non-payment go back to 2017, yet CWNevada unit still gave a total of $68,500 to politicians over 2017 & 2018. #rjnow pic.twitter.com/WVvyppURpM
— Todd Prince (@toddprincetv) May 3, 2019
Did we mention that this is a complicated matter?
2022 Bankruptcy Filing
The latest move from NuVeda was a Chapter 11 bankruptcy filing in April 2022. The company claimed “aggregate noncontingent liquidated debts” in the amount of $3,024,725. NuVeda’s 2021 tax return showed $550 in gross receipts.
The list of creditors with the largest claims showed four entries:
-Jennifer Goldstein = $2,565,276.41 via litigation
-Shane Terry, Phillip Ivey, and CW Nevada = unknown sums due to pending litigation
The whole situation is a mess, as litigation remains ongoing and NuVeda tries to leave everything behind.
NuVeda LLC has filed Chapter 11 in the District of Nevada
Assets: $0-$50K
Liabilities: $1M-$10M
Subchapter_VRepresented by:
MITCHELL D. STIPP
LAW OFFICE OF MITCHELL STIPP #bankruptcyhttps://t.co/QT7maTNz8v— RK | Consultants (@_RKConsultants) April 11, 2022
