LOS ANGELES--(BUSINESS WIRE)--In the wake of MedMen’s financial statements released last week, The Inception Companies announced today that its affiliated entity, MMMG-MC, has filed a demand for arbitration in place of its pending lawsuit alleging breaches of fiduciary duty by MedMen founders Adam Bierman and Andrew Modlin.
Daniel Petrocelli, attorney for Inception founders Brent Cox and Omar Mangalji, said the recent reports and news regarding MedMen prompted a decision to seek a speedier resolution through arbitration rather than the courts.
“Since our clients filed their lawsuit alleging mismanagement of MedMen, the company’s losses have continued, several executives have resigned, debt is accumulating and valuable real estate assets have been sold,’’ Petrocelli said. “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.’’
Cox and Mangalji, through MMMG-MC, sued Bierman and Modlin earlier this year after MedMen unilaterally prohibited MMMG shareholders from having their shares distributed to them to trade, while allowing other shareholders to do so.
The lawsuit stated that “Not only did defendants Adam Bierman and Andrew Modlin fail in their obligation to operate in good faith and in the best interests of MMMG, but they treated MMMG and MedMen as their exclusive property and personal piggybank. They used their nearly complete control over the MedMen enterprise to enrich themselves at the expense of the Plaintiffs and the other shareholders of MMMG.’’