A year and a half after making a $1 million loan to Aeon Botanika Los Angeles Inc. and Golden Phoenix Holdings LLC, Cutter Mill Credit LLC is suing the two entities for not repaying the money.
Aeon and GPH borrowed the money to develop and operate a cannabis store in West Hollywood, claiming it would also house a cannabis lounge and a wellness studio.
The original loan of $1 million was made in March 2021 and was to be repaid within 48 months. By December 2021, Cutter Mill agreed to let Aeon and GPH defer making the principal and interest payments that were due on Oct. 1, 2021, in the aggregate amount of $99,698.11. They were given an extension until Dec. 31, 2021, and the borrowers also increased the amount of the loan by another $305,000.
The borrowers continued to ask for more deferments, while also increasing the amount of money they borrowed. As of Oct. 7, 2022. Aeon and GPH owe $2 million in principal and $315,460 in unpaid interest, plus late charges and advance fees, according to the complaint.
The legal complaint also suggested that the borrowers don’t have the money to pay what they owe. In order to pay the debt, Cutter Mill says it should get to take the collateral on the loan, which could include any cannabis licenses issued to the companies.
Cutter Mill said in the complaint that Aeon WeHo, as it is called, occupies the real property located at 8448 Santa Monica Boulevard, West Hollywood, California. Cutter also stated that Botanika LA occupies the property located at 1144 S. La Brea Avenue in Los Angeles.
Nicole Fox is listed as the founder and CEO of Aeon, and she is also a manager of GPH. The board also included Neil Lee Parekh, aka Suneil Parekh, and David Leider, who each agreed, in writing, to support the sale of the businesses and all, or a portion of, the assets of GPH that would either:
- Yield sufficient net proceeds to repay the Loan, in full, or
- Be otherwise approved by Lender.
Cutter Mill is asking that a receiver be appointed in order to get back something towards repayment of the loan. The complaint asks, “That a receiver be appointed to take control of and manage the retail operations, marshal the assets of the Borrowers secured by the loan documents, and develop a strategy to operate the retail business and/or sell the businesses and assets of the Borrowers.”
The Aeon Facebook page shows Fox in a construction photo dating back to October 2020 and says the store would open in early 2021. The company’s website just says that it’s opening soon. A current Google image just shows an empty storefront.