Adam JacksonOne of the former owners of Green Dragon and current stockholder of Eaze Technologies filed a lawsuit in Delaware’s Court of Chancery on Tuesday, the same day a foreclosure auction for the company was reportedly scheduled to take place.
According to Law360, Andrew Levine’s lawsuit seeks to access the California-based marijuana delivery company’s records related to a controversial note purchase and security agreement, as well as alleged plans for a “take-under” sale. The timing of the legal action could suggest an attempt to investigate or potentially halt the auction process, which was allegedly orchestrated by Eaze CEO Cory Azzalino.
According to the complaint obtained by Law360, Levine wants to investigate what he describes as efforts by Netscape founder James Clark and stockholder Thomas Jermoluk to acquire company assets at below-market value. He also claims Eaze “flatly rejected” his request for company records under stockholder access rights.
In July 2023, the Levine family filed a separate lawsuit against Eaze, alleging that Eaze misled them about its financial situation to complete the 2021 acquisition deal. Azzalino denied their claims, telling news outlets at the time that Eaze is in a “healthy financial position.” FoundersJT LLC, an entity formed by Clark and Jermoluk, entered the picture in 2022 when it issued a nearly $37 million loan to Eaze, which included the right to take control if revenue targets weren’t met.
“Eaze was on the brink of not being able to make its payroll before the Green Dragon acquisition closed, the lawsuit claims, and immediately after it did, three members of the Levine family were quickly forced out and fired in February 2023,” according to Green Market Report.
It’s the latest in a series of headlines tied to Eaze. In April, the company narrowly avoided a strike in California by reaching a tentative agreement with four chapters of the United Food and Commercial Workers Union representing around hundreds of delivery drivers statewide. The deal, which came after nine months of negotiations, addressed issues such as pay and vehicle reimbursement rates.
Law360 also reported that a key witness avoided prison last month after testifying against two individuals accused of creating a complex scheme that allowed Eaze to process federally illegal cannabis payments from 2016 to 2019 using sham websites and shell companies.
It’s unclear whether the auction proceeded as scheduled or if Levine’s legal action impacted the process. Eaze did not immediately respond to requests for comment on the planned auction or the lawsuit.
