Herbl is pursuing legal action to recover some of the millions of dollars it says it is owed by other companies, following its collapse last month.
However, according to court documents seen by MJBiz Daily, who first reported the distribution giant’s downfall, it is also facing its own lawsuits from brands attempting to recover debts.
The California-based company’s remaining assets are now understood to be the target of retailers, brands, investors, creditors and tax collectors, with a Los Angeles-based attorney at Manzuri Law Alexis Lazzeri suggesting that ‘investors and claimants will be prioritised over the brands seeking payment’.
It’s as yet unclear how much Herbl owes its lenders, which are understood to include East West Bank and Roystone Capital Management, or its brand partners like Sunset Connect.
According to a lawsuit files in San Francisco last month, Sunset Connect is seeking compensation for $130,000 worth of pre-rolls that Herbl sold to retailers and collected the money for, before allegedly telling Sunset ‘it would not be paying’ them.
Sunset Connect’s founder and owner Ali Jamalian told MJBizDaily that while Herbl did a ‘great job’ as a distributor, the subsequent ‘lack of transparency and willingness to make so many brands a casualty of said lack of transparency is not excusable.’
Herbl says it is owed around $10m from its former partners, at least 10 of which it is now pursuing in court, according to records.
