The former chief financial officer of MedMen Enterprises filed suit against the California-based company this week, alleging top executives forced him to “choose between complying with his fiduciary duty to the company and its shareholders or turning a blind eye and a deaf ear to improper and unlawful behavior.”
James Parker, who resigned as CFO in November, claims in the lawsuit he was forced out by CEO Adam Bierman and President Andrew Modlin.
The lawsuit – filed in Superior Court of California in Los Angeles County on Jan. 29 – requests unspecified damages for breach of contract, wrongful termination and breach of implied covenant of good faith and fair dealing.
MedMen senior vice president of communications Daniel Yi downplayed Parker’s significance with the company and promised it will fight back.
“James Parker worked at MedMen for less than a year and half, quit and is now demanding more than $22 million from the company while making wild allegations that have no basis in fact,” Yi wrote in an email to Marijuana Business Daily.
“These are the baseless claims of a disgruntled former employee, and MedMen will vigorously defend itself in court.”
According to the suit, Bierman and Modlin “engaged in a course of conduct which recklessly jeopardizes” the company.
The alleged breach of fiduciary duties outlined in the suit cover a dozen different allegations against Bierman and Modlin, including:
- Ordering Parker to wire “hundreds of thousands of public dollars to a ‘consultant’ in Canada to ‘buy up our stock when it is under attack.'”
- Ordering Parker to “dig up dirt” on corporate and personal enemies.
- Refusing to retract a materially incorrect news release until forced to do so by Parker.
- Ordering Parker to pay “prohibited success fees to unlicensed broker-dealers.”
- Violating Canadian securities regulations by not disclosing compensation packages of top company executives. MedMen trades on the Canadian Securities Exchange as MMEN.
- Forcing Parker to make a $10,000 political donation because Bierman and Modlin had already contributed the maximum legal amount to a candidate in Nevada.
Parker alleges in the suit that Bierman and Modlin came to view him and his responsibilities to the company as an “impediment to … their unfettered conduct” and began a “rolling demotion” in an attempt to force Parker out of MedMen.
“CEO Bierman and President Modlin demanded and received whatever they wanted, whether or not it was in the best interests of the company,” the lawsuit alleges.
The suit alleges that Parker was ordered to spend “several millions of company dollars” on expenses such as 24-hour armed security for Bierman and Modlin, personal drivers, private jets, luxury hotels, special-order pearl white Escalades for Bierman, a custom $160,000 Tesla SUV for Modlin, extravagant custom conference room tables that cost “tens of thousands of dollars apiece” and placing Bierman’s personal therapist on staff as a “performance improvement expert” with a salary of over $300,000 a year.
John Schroyer can be reached at [email protected]