An investment banker has been sued in a New York state court in a lawsuit alleging he used his “celebrity status” and lied that he had $5.4 million on hand to sell a nationwide cannabis company to buy.
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Reid Drescher, husband of The Real Housewives of New York City’s Aviva Drescher and cousin of The Nanny star Fran Drescher, has been sued by P&A Ventures LLC, a California-based cannabis company. His companies – Gateway Privileged Fund LLC, Cape One Management LLC, Hudsie Harver LLC and Spencer Clarke LLC – were also named as defendants.
“Reid Drescher has publicized his relationships with celebrities, including his cousin Fran Drescher, star of ‘The Nanny,’ and his wife Aviva Drescher of Bravo’s ‘The Real Housewives of New York,’ claiming to have deep pockets and a list of strong ones Business and celebrity connections that would drive forward [P&S Ventures] to the next level,” the complaint reads.
P&S claims that based on Drescher’s misrepresentations, it refrained from pursuing opportunities with other investment groups, which ultimately led to an agreement to sell 15% of Gateway and 5% of Hudsie Harver at a “large discount.” .
P&S claims the deal quickly fell through when Drescher and Gateway were unable to produce the promised $5.4 million.
“As Drescher admitted, Gateway did not have a sufficient pool of capital, as shown, to fund the entire $5.4 million investment. Instead, Gateway had to go out and raise capital from outside investors, which it could not readily do,” the complaint reads.
At the time of filing the complaint, P&S says it received only $1.3 million from Gateway and was forced into receivership. When the company eventually emerged from receivership, it found a new investor willing to fund the amount needed, but the complaint says Reid Drescher attempted to block the transaction, claiming he had approving rights.
According to the filing, Drescher refused approval unless Gateway and Hudsie Harver’s combined interest in P&S was increased to 40%, the $1.3 million capital contribution was repaid, and P&S paid Gateway 70% of all distributions until it received $4 million. P&S says it refused to give in to such “senior blackmail.”
“Although Gateway contributed just $1.3 million out of a total of $5.4 million in promised capital contributions — and gave the company nowhere near the benefit of its business — Gateway claimed to have full power and the right to, against a veto a critical funding opportunity in the interests of the company and its other members,” the complaint reads.
According to P&S, the debacle damaged its reputation and hurt its business, resulting in the loss of several valuable cannabis licenses and other growth and development opportunities.
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Source: https://www.law360.com/articles/1474248
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