A lawsuit filed against MedMen Enterprises Inc. (OTC: MMNFF) that argued CEO Adam Bierman and President Andrew Modlin made decisions in their own personal interest rather than that of shareholders has been dismissed, the cannabis company said Thursday.
Plaintiffs Brent Cox, Omar Mangalji and MMMG-MC voluntarily dismissed the case, which was filed in Los Angeles Superior Court, MedMen said. MMMG-MC is an affiliate of Inception Companies, a cannabis real estate investment trust.
The dismissed case eliminates a suit that MedMen, its related brands and co-founders Adam Bierman and Andrew Modlin considered "frivolous" from its onset, the company said.
The plaintiffs were early investors who had earned millions and who “sought to take further advantage of their position as insiders” by filing suit alleging wrongdoing tied to what MedMen said was a "common business decision" to lock-up certain MedMen shares held by MMMG.
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Inception Says It's Seeking Arbitration
The Inception Companies said in a Wednesday press release that its affiliate MMG-MC has filed a demand for arbitration in lieu of a lawsuit.
Since the initial lawsuit was filed alleging mismanagement, "the company's losses have continued, several executives have resigned, debt is accumulating and valuable real estate assets have been sold," attorney Daniel Petrocelli said in a statement.
"Meanwhile, MedMen's procedural filings delayed the case until November. That delay is untenable given our clients' views that MedMen's financial condition is rapidly deteriorating. In order to obtain prompt relief, they have decided to file an expedited arbitration.''
MedMen said that Inception opposed arbitration for months, but has now reversed course.
"The voluntary dismissal serves as an acknowledgment that Cox and Mangalji should not have filed the lawsuit in the first place. By opposing MedMen’s earlier efforts to compel arbitration, Cox and Mangalji delayed final resolution of the dispute and wasted significant shareholder resources by requiring MedMen and its affiliates to litigate the matter," the Culver City, California-based company said.
Large Shareholders Sue MedMen, Allege 'Conflicted Corporate Structuring'
Photo courtesy of MedMen.
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