MedMen Pushes Back Against CFO's Claims

The MedMen trial continues this week as the company pushes back against former CFO James Parker. According to reporting by Law360, MedMen’s attorney William F. Dugan of Baker McKenzie has tried to argue that because Parker negotiated his employment contract essentially on his own, the terms aren’t enforceable.

Law360 reported that most of Dugan’s questions during the third day of the trial reviewed the process and manner that Parker pursued while negotiating his employment contract with MedMen. Despite having a personal attorney hired to review the contract, Parker apparently took the lead. He also testified that even though there was a compensation consultant, he signed the contract without waiting for a report from the consultant. The testimony suggested that the contract contained some language that the consultant didn’t favor. Parker is claiming to be owed $24 million under the terms of the contract.

MedMen though says that Parker violated his contract by leaving the company and his job without giving the required 90-day notice. The company has insisted that Parker was a poor CFO who was unable to perform the duties required of the role. They say he quit when he was told that his performance was under review. MedMen has also filed its own lawsuit against Parker for breach of contract, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secrets, and conversion.

Case Settled In 2020

While this case has gone to court, MedMen actually settled one case last year from investor Brent Cox, a company known as MMMG-MC Inc., and derivatively on behalf of MMMG LLC. Cox was a former board member of MedMen, serving in that role from March 2016 to March 2018, and Founder of The Inception Companies. The general gist of the lawsuit was that Cox and Omar Mangalji (another founder of The Inception Companies) received shares that were not able to be traded until the lockup period ended on November 29, 2018. The lawsuit claimed, ” On November 21, 2018, BIERMAN announced that limited partners in Fund I and Fund II would have 100% of their shares issued to them in “mid-January” 2019, with the share totals awarded to them calculated at the then-current market value. At that time, a portion of their MEDMEN CORP. shares would be free trading, while the remainder of their shares would remain locked up until the thirteenth month thereafter, after which once per month on a twelve-month basis their “remaining shares become free-trading based on a monthly drip,” in equal installments.”

At the time Cox stated, “We have a long history with MedMen – as one of the largest and original shareholders of the company. Sadly, we are backed into a corner here and compelled to take action on behalf of all stakeholders of the company.”
That case was settled when MedMen issued 1.5 million Class B Subordinate Voting Shares to MMMG-MC as a part of the overall 24 million share settlement with the claimants, which included contributions from other parties and allowed the issuance of shares to all MMMG shareholders. “Although MedMen denies any wrongdoing, the Company believes its contribution to the settlement is in the best interest of its shareholders.”
MedMen still faces employee lawsuits.

 

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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