Phil Ivey recently sued a Las Vegas cannabis dispensary entrepreneur and asked for $1.9 million. But the company filed for Chapter 11 bankruptcy on April 11.
The renowned poker player helped the company, NuVeda, LLC bankroll in 2014. He was in a lawsuit filing against the company and its subsidiaries.
The lawsuit had two other plaintiffs, Dotan Melech and Shane Terry.
Ivey asked for an equity stake in the firm and money owed from a business loan. Even so, the lawsuit hasn't been settled.
PokerNews obtained court documents that show that NuVeda, LLC initially gave Ivey a three percent equity share in an exchange for an almost $2 million line of credit that he gave it. By then, the firm had benefited from Ivey's financial standing and money.
The lawsuit says that the ten-time World Series of Poker (WSOP) bracelet champion has significant financial resources and business experience.
They supported the company's business strategy and offered it financial viability proof in its application and the amount of taxes it paid. The State of Nevada listed the Poker Hall of Famer as an owner in NuVeda's six licenses.
More About Lost Equity
NuVeda promised Terry, one of the plaintiffs, $1.75 million for the 23 percent interest he had in it, but it only paid him $250,000. Terry and Ivey claim that the company's co-owners, Pouya Mohajer and Pejman Bady, snatched their shares without seeking their written consent.
Adam Stein-Sapir, Pioneer Funding Group, LLC bankruptcy expert, said that Shane Terry ought to have received $1.75 million for interest but got $250,000. Ivey should have retained 3 percent interest, but it was eliminated, and it is uncertain how much he got on the $1.9 million line of credit.
Court documents state that the State of Nevada held NuVeda's license paperwork in December 2015. Bady is reported to have submitted the wrong documents to the state after redistributing Ivey's license interest to Mohajer and himself.
Stein-Sapir said that the amount that the company drew on the $1.9 million line of credit is uncertain, together with the amount it paid to Ivey. Yet, the 2022 Super High Roller Series Europe winner is determined to keep his 3 percent equity stake in NuVeda.
NuVeda Is Protecting its Assets
Mohajer and Bady are NuVeda's key principals and those of its subsidiaries. It runs two dispensaries that it has named The Sanctuary. One of them is in Downtown, while the other is in North Las Vegas, and Ivey should have an interest in them.
Even so, NuVeda's latest move to file for bankruptcy might prevent Ivey from getting his money. Stein-Sapir elaborates that filing for bankruptcy stops the court's litigation as it shifts the case to a bankruptcy judge.
He stated that some firms file for bankruptcy to protect their assets. It allows them to agree with creditors to foreclose rather than sell their assets.
The Chapter 11 filing comprises Terry, Ivey, and two more creditors. NuVeda states that its liabilities range from $1 million to $10 million, and its assets are worth less than $50,000.