Debra BorchardtMarch 20, 2023
Instagram celebrity Dan Bilzerian and his cannabis-focused company Ignite International Brands are in hot water with the courts for not turning over documents in a contract dispute case. According to Law360, the company was told on February 28, 2023, that it had 10 days in order to produce 65 documents. Apparently, the company didn’t do so and now the courts are threatening once again that Ignite will face more severe sanctions like daily fines. The company was given another five days to produce the documents.
Law360 reported that on Thursday, “U.S. Magistrate Judge Elayna J. Youchah ordered Ignite International Brands Ltd. to turn over the 65 documents in question within five days of the court’s order and to pay the attorney fees and costs incurred by defendant Consulting By AR LLC in filing its motion to compel.”
For its part, Ignite says the documents are privileged. The company was asked back in August to turn over the documents, but the company objected. The judge, however, said the objection didn’t change the due date and the motion to stay the order had not been ruled upon.
Thursday’s order stated, ”
Ignite has refused to do an act the Court has twice ordered. While Ignite moved to stay the August 12, 2022 Order, as explained on February 28, 2023, no stay was granted and, thus, to this date, Ignite also failed to comply with that Order as well. Ignite has neither moved to stay the February 28, 2023 Order, nor has it objected to that Order. The Court
finds an order to coerce compliance is appropriate at this time.
Law360 did note that Kimberly P. Stein of Flangas Law Group, representing Ignite Spirits Inc., a subsidiary of Ignite International said on Friday that they believe the order is a mistake and the company has complied with the court’s prior order. It reported, “Ignite International filed an objection and appeal to the order on Friday, arguing that it had updated its privilege log as directed by the court, and that the court therefore does not have authority to find it in contempt and levy sanctions.”
Original Case
The trouble started when Ignite Spirits Inc. sued Consulting by AR in Clark County Court in August 2021 over an agreement with Resorts World Las Vegas. Ignite says that Consulting by AR had agreed to secure a contract with Resorts World which would purchase Ignite’s products. The products would be available at kiosks and at the bar. In addition to that, Resorts would host a launch party. However, Ignite claims that by July 1, 2021, no agreement had been reached and Ignite did not pay Consulting by AR. However, Consulting by AR claims the opposite happened. It says it had been the one to approach Ignite Spirits and managed to secure terms even more favorable than what Ignite Spirits had asked for.
SEC Case
The fight with Consulting by AR is only one problem facing Ignite, which seems to have trouble providing documents. Last year, the SEC announced it was investigating potential accounting fraud at the company. On May 20, 2022, the SEC staff issued and served a document subpoena against Ignite International. The company was asked multiple times to provide the requested documents, but like the above-mentioned case – failed to provide them. Ignite argued that the SEC’s investigative subpoena should be “stayed” because criminal authorities were conducting a separate investigation into the company.
The SEC complaint stated, ” Several categories of documents called for by the May 20, 2022 subpoena have never been produced, including, for the fiscal years 2020 and 2021: Respondent’s accounting records; any purchase orders, invoices, and other documentation related to sales of Respondent’s products; and Respondent’s communications with its auditor. ”
Ignite History
Ignite had been a publicly traded company using the symbols BILZ for the Canadian Securities Exchange and BILZF for the OTC Markets Group. The symbol took its lead from the company’s controversial leader Dan Bilzerian. However, the company went private in August 2022 as the company’s legal problems began. Bilzerian, a one-time professional poker player started Ignite as a company that sold CBD products and vapes. He has over 30 million followers on Instagram and he became famous for his Instagram photos featuring lots of guns and scantily clad models. He most recently posted a photo in December 2022 where he was in South America.
The company continues to sell its products and still features its muscled leader and bikini models on the website.
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