Ex-partners file dueling lawsuits
In a pair of lawsuits filed over the past several months, former partners in a hemp seed startup venture are accusing one another of a series of financial misdeeds.
Michael Leago of IHE Holdings LLC in Boulder was the first to sue, filing a complaint in U.S. District Court in Denver in November against Jeremy Ricks of Longmont-based Front Range Har vest LLC. Ricks then followed up this month with a suit of his own filed against Leago in Boulder County District Court.
The pair, neither of whom could be reached for comment, joined forces in 2019 through a fairly complex partnership agreement to turn large quantities of hemp seeds into seed starts — small plants about six inches to one foot tall that eventually grow into a full hemp plant — which would then be sold to growers, court documents show.
According to Leago’s complaint, he provided Ricks with more than $4.5 million in hemp starts and was never compensated. The suit also claims Ricks owes more than $400,000 in management fees.
In Ricks’ filing, his attorneys call Leago’s suit a “baseless and malicious complaint” and accuse Leago of “deception, lies, incompetence, and other reckless, fraudulent and tortious misconduct.”
According to Ricks’ complaint, Leago “preyed upon FRH’S trust and positioned himself to seize control over the partnership’s finances and divert all revenues and profits to himself and his company” after striking a deal to sell starts to a former partner of Ricks on speculation.
Leago then “stalled, evaded and ultimately refused” to provide accounting documents to Ricks, his complaint claims.
When the deal with former partner Tim Rice went south, Ricks claims Leago left him on the hook for the losses.
As a result, Leago “effectively destroyed FRH as a viable business,” Ricks’ lawyers wrote in the complaint.
Ricks is asking the court to order the payment of compensatory damages estimated to exceed $2 million and unspecified punitive damages.
For his part, Leago’s suit demands damages of at least $4.5 million.