Unrivaled Brands Files Suit Against Frank Kavanaugh, Jay Yadon, and Bernard Steimman for Fraud Related to the Acquisition of People’s First Choice LLC
SANTA ANA, Calif., Nov. 07, 2022 (GLOBE NEWSWIRE) -- Unrivaled Brands, Inc. (OTCQX: UNRV) (“Unrivaled” or the “Company”), a multi-state vertically integrated cannabis company with operations in California and Oregon, filed a cross-complaint on September 20, 2022 against Frank Kavanaugh, Jay Yadon, Bernard Steimman, and their company, People’s California, LLC (“People’s California”), for Fraud and Negligent Misrepresentation related to the sale of the dispensary People’s First Choice (the “People’s Dispensary”) and other assets to Unrivaled in November 2021. People’s California lists Fort Ashford Funds, BRP Ventures, and People’s, LLC as Managers/Members on filings with the California Secretary of State. Fort Ashford Funds is a privately held investment firm that lists Frank Kavanaugh, Susan Kavanaugh, and Andrew Krajacic as Managing Directors on its website. BRP Ventures is a consulting firm listing John Yadon as a Manager/Member.
Unrivaled alleges in the Cross-Complaint, among other things, that around the time of the sale, Kavanaugh, Yadon, and Steimman, through an entity New Patriot Holdings, Inc., siphoned away over $5,000,000 from Unrivaled through backdated accounting entries and write-offs related to the People’s Dispensary.
“One of my first tasks as Interim CEO was to investigate the events and circumstances related to the acquisition of People’s California assets. I had grave concerns about the transactions and the significant red flags surrounding the deals. The more my team digs into the facts, the more we find,” said newly appointed Interim CEO Sabas Carrillo. “In addition to our Cross-Complaint for fraud based on what my team and I had found after only a few weeks at Unrivaled, we expect additional claims will have to be made in the near future as we continue to investigate,” Carrillo continued.
According to the Cross-Complaint Unrivaled assumed over $4,000,000 in IRS tax debt accrued by the People’s Dispensary while under the leadership of Kavanaugh, Yadon, and Steimman. In addition, the Cross-Complaint alleges that $17,000,000 in cash was required to be paid by Unrivaled before the deal had even closed. The Cross-Complaint notes that part of the substantial up-front cash payment was demanded because Kavanaugh, Yadon, and Steimman required funding for a pending project in Salinas, California.
“We want our shareholders, the city of Santa Ana, and the entire California cannabis community to know that we are committed to aggressively defending Unrivaled from fraud,” said Carrillo.
About Unrivaled Brands
Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon. In California, Unrivaled Brands operates three dispensaries with direct-to-consumer delivery, two cultivation facilities, and several leading company-owned brands. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.
For more info, please visit: https://unrivaledbrands.com.
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Released November 7, 2022