The Mockingbird investors' lawsuit took an interesting twist recently as a defendant company director took the fight to the Mississippi Supreme Court.
Mockingbird Cannabis is a medical marijuana company with two facilities in Raymond and Clinton. The company recruited Mississippi investors. However, the company has woefully underperformed expectations. A group of investors sued several company officials and board member. Their lawsuit alleged the defendants looted the company and made a few sweetheart deals among themselves.*
The first lawsuit was filed on July 3 in Hinds County Circuit Court but was never served on the defendants. The case was assigned to Circuit Judge Debra Gibbs. Defendant Samuel Millette, III (No relation to Francois) filed a motion to compel arbitration, arguing the plaintiffs signed an operating agreement that required arbitration to settle disputes. Mr. Millett is a member of the Board of Directors. The plaintiffs filed an amended complaint on September 18. The Court approved the filing of the amended complaint.
Mr. Millette was not content to wait for the case to play out in Circuit Court so he filed an interlocutory appeal to the Mississippi Supreme Court that took a rather interesting position.
Petitioner Samuel Martin Millette III (""Millette"") seeks permission to appeal an interlocutory Order of the Hinds County Circuit Court reflecting that Special Appointed Judge Barry Ford assumed jurisdiction over the case below without authority under any Special Judge Appointment Order and without any recorded order of reassignment from the originally assigned trial judge. Further, the Order at issue (granting the Plaintiffs' motion for leave to file an amended complaint) was entered by Judge Ford during the pendency of Millette's motion to compel arbitration, impliedly denying Millette's Motion to Stay, in violation of this Court's mandate that ""all proceedings"" are suspended pending resolution of the arbitration issue. These procedural and jurisdictional infirmities should be reviewed and corrected.
The appeal might have exposed a dirty little secret of the Hinds County Circuit Court. The Mississippi Supreme Court appointed James Bell and Barry Ford as Special Circuit Judges to assist Circuit Judge Debra Gibbs with her docket . Judge Gibb's caseload is strewn with cases assigned to her but containing orders signed by Judges Bell and Ford without any notice of transfer or recusal.
The case at hand was assigned to Judge Gibbs but Judge Ford has been signing orders in her name as he did on October 10.
Mr. Millette and his attorney, Stephen Montaganet, noticed this little feature of the docket and pounced.
Although the case was originally assigned to Judge Debra Gibbs, Judge Ford entered the subject order allowing Plaintiffs to file an amended complaint. This Order must be vacated because Judge Ford had no authority to enter it... On February 21, 2024, this Court entered its most recent supplemental appointment order, authorizing Judge Ford to serve ·'on a temporary basis" and to preside ... in cases currently pending in the Seventh Circuit Court District, Subdistrict Two."As of the filing of this Petition, there has been no order of recusal or reassignment entered by Judge Gibbs, or any other order documenting any ""transfer"" of the action to Judge Ford. Id. The Docket Sheet continues to identify Judge Gibbs as the presiding Judge.The complaint argues Judge Ford's appointment only applied to cases assigned to Judge Gibbs when he was appointed in February 2024, five months before the subject lawsuit was filed. Judge Ford does not have a "constantly expanding scope of jurisdiction." Since any action taken by Judge Ford was unauthorized, all of his orders in the case are null and void or so the complaint argues. Mr. Millette also claims there is no order transferring the case to Judge Ford. Thus the Mississippi Supreme Court should stay the case pending resolution of the arbitration issue and interlocutory appeal while dissolving all orders signed by Judge Ford.
Mockingbird recruited Mississippi investors. The Mockingbird Crew "encouraged" investors to set up LLC's and invest through them. The plaintiffs followed the instructions. The complaint states the defendants pooled the money into a larger LLC. The lawsuit called the arrangement "a pyramid." The company established facilities in Raymond and Clinton.
The complaint claims although Millette told investors the decision was only a speed bump, Patterson eyed getting a medical marijuana license and facility in Missouri. Thompson allegedly told Patterson he could not use the investors' money for such a purpose. The complaint claims Patterson removed Thompson from the board of directors.
Patterson, Wilkin, Bunch, and Croft set up shell companies in Missouri, funding them with $4 million allegedly withdrawn from the Mockingbird (Mississippi) investments, and obtained a license and facility in Missouri. They named the facility "Navarro Farms."
The Gang of Four allegedly offered shares of Navarro Farms to the Mississippi investors without disclosing they were already funding the operation. The complaint accuses the Gang of Four of engaging in more shenanigans:
* Investors funds were allegedly used as personal slush funds. The complaint charges Mockingbird paid $2 million in management fees and another $1.5 million in travel expenses in 2021 and 2022 to a number of officials and directors. No records of the compensation were ever produced despite requests from investors, if the complaint is to be believed.
* Patterson and Wilkin allegedly diverted $7 million from Navarro Farms to buy out partners in another operation. The facts of said buyouts are not known as the Defendants (allegedly) would not produce any records.
* The complaint charges Croft shirked her duty as company lawyer to comply with state and federal law as well as any contracts. She stands accused of allowing Patterson to engage in unlawful activity or expose Mockingbird to liability. She did not ensure the company kept adequate financial records while investors money was "misappropriated."
* The 160,000 square foot Raymond facility was valued at $25 million. However, Patterson sold it to Gaylon Patterson of the Patterson Family Trust in Oklahoma for $10 million. Gaylon is Clint's uncle. The complaint claims Gaylon, Gary Patterson, and Elizabeth Patterson are members of the trust. Gary is Clint's firs cousin. Elizabeth is married to Gary.
The trust leased the facility back to Mockingbird at $100,000 per month for 10 years. Investors claim they had no clue the transaction took place.
The plaintiffs claim Millette and Brown consented to the sale as members of the Board. However, they told investors the facility was a fixed asset, not leased property. The complaint states an April 2024 update said the Raymond facility was a company asset while never admitting it was no longer owned by the company. The investors asked for records of the transaction but the defendants allegedly would not provide them.
* The complaint claims Josennhans admitted $8.3 million "had been misappropriated. Wilkin allegedly fessed up to loaning investors' funds to fund operations in other states while lying he divested himself of all Mockingbird and Navarro Farms holdings. However, filings at the Secretary of State's office state Wilkin was still the manager.
* The plaintiffs requested the following records but to no avail: all operating agreements, an organization chart, names of Board members as well as their terms, identities of all corporate officials as well as their starting and ending dates of employment, minutes of all meetings of the Boards of Directors, and a schedule of all who hold "units or interests."
The plaintiffs claim the true state of Mockingbird and Navarro Farm's assets are unknown. The following passage says it all:
The true state of Mockingbird's and Navarro Farm's assets today is unkown. but Plaintiff's losses are clear: There is nothing to show for their investments - Defendants can not even tell them who owns what today - and Mockingbird, which raised as much as $32,000,000 has nothing.
* The lawsuit takes full aim at the Jackson law firm of Cosmich, Simmons, & Brown. It alleges John Cosmich and Brown's brother served on the Navarro Farms Board of Directors. Brown and partner Warchol allegedly solicited investments for "Mississippi Grow" and "Missouri Grow."
Cosmich lawyers stand accused of helping investors establish LLC's while assisting them with background checks and disclosure forms.
The plaintiffs claim Cosmich, Simmons, & Brown PLLC is a "substantial investor" in Mockingbird. Cosmich is allegedly counsel to Mockingbird.
* Plaintiffs and their LLC's:
Marcus Burger: NLWH, LLC
Nathan McHardy: Red Work Capital, LLC, Fire Wheel, LLC. Disclosure: McHardy's Briarwood Liquor Store is an advertiser on this website.
Winston Thompson: Cropshare, LLC
Tonyatta Hairston: Felix Allen, LLC
Brandon Baggett: BBG Investments, LLC, Salo Investments, LLC
John Burns: High Times, LLC, High Times Two, LLC
Kimberly Hardy: Generational Wealth Investments, LLC
Palo Giscombe & CHristian Groff: Petit Bois 68, LLC
Zachary Harvey: 2901 Investments, LLC
Patrick Taylor: DFT Capital, LLC
Defendants
Patterson is CEO of Mockingbird, Navarro Farms, and Navarro Farms Vandalia Oklahoma resident.
WIlkin is COO of Mockingbird and Chairman of the Board of Navarro Farms. Oklahoma resident
Bunch is CFO of Mockingbird. Oklahoma resident
Croft is a Madison attorney and was Chief Legal Officer of Mockingbird.
Millette is a Director of Mockingbird companies
Brown is manager of Navarro Farms and several Mississippi LLC's. He is a partner in the Jackson law firm Cosmich, Simmons, & Brown.
27 comments:
Finally someone is paying attention
Greed seldom prospers.
They can't hardly admit there's a big problem can they?
This is what happens when incompetent politicians with law degrees get elected to be a judge.
Lawyers, the MS legislature and big money always leave carnage in their wake.
Hard to ignore a backed-up toilet!! Better call Roto-rooter
I can't help but notice that Kingfish never publishes a disclaimer for stories concerning the politicians who advertise on the site.
I smell graft; serious graft.
In my experience, the filing of a motion to compel arbitration stays everything (except for discovery on the arbitrality question only, if even that). This petition for permission to appeal presents a very interesting question: does the stay apply to amendments of pleadings? What if those amendments affect the arbitrality question?
I don't consider amending a complaint as a "proceeding" if that amendment might affect the the motion to compel arbitration.
12:18, not to mention legislators.
It ain't medicine.
More reefer madness.
So Judge Gibbs couldn't even be bothered to issue her own orders recusing herself and transferring the cases? What the hell is she doing?
I'm trying to remember, did they smoke weed in Grease?
Oklahoma money behaves just like I would expect a trash Midwest frontier state to behave. There is a reason they are called the Sooners and these types of behaviors in business are literally enshrined in the name of their University.
This "my medicine" bunch is shady.
Legalizing more drugs. What could go wrong?
Debra Gibbs is lazy and incompetent and everyone being forced to litigate in Hinds County knows it, too!
"what a tangled web we weave, when....."
The entire b/s operation around "MEDICAL" maryjo is surrounded by crap like this. Sold as a get-rich-quick scheme to various investors in the area by charlatans, and invested in by other charlatans, all around a charlatan product promoted to the masses in whatever form it could be sold (opening the door to recreational for the tokers; pain relieving medicine to those who can't put up with the rigors of getting old; and medicinal to those that think a natural drug is better than a pharmacy produced drug; etc.) all done to entice investors into their pyramids and schemes.
Mockingbird is one of the first to fail; along with the so-called 'testing company' that was bought and paid for by some of the producers. Others will start toppling as the supply greatly outpaces the demand.
But all the while - those on the top of the pyramids will do fine, as is always the case, unless they take the Life of the Rich and Famous as did a recently failed congressional candidate who spend it all even when they no longer have it.
Denied but time wasted = goal.
A very complicated case for a very non-sophisticated judge. Not to mention a very complicated new law. Yikes, they better be prepared to have this drag on at least 7 years.
Mary Jane is still federally illegal, so this is staying right here. In the bed of snakes
This is about common law theft. The subject is money and breach of duties. Weed is irrelevant.
When medical reefer investment pitches were going on in Mississippi, it was well known to investors to "stay away from the bunch from Oklahoma as they are shady". I heard it several times.
With a population of 4,000,000 Oklahoma has more grifters than Mississippi with a population of 3,000,000. Right?
Others will start toppling as the supply greatly outpaces the demand.
Yup. There are pot card holders selling the "medicine" to non-card holders. FACT.
The County Line plaza location recently had the locks changed by the landlord due to non payment of 60k in back rent. Sounds like a straight up ponzi scam
"A very complicated case for a very non-sophisticated judge."
I totally agree. That's probably why it was taken away from Judge Gibbs. Too bad she neglected to sign the transfer order.
8:46: Word on my street was "Those Oklahoma guys are wild as AF."
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