News

Receiver appointed in fight over microgreen company

Receiver appointed to oversee operations amid ownership, management dispute

By Henry Meier, Los Angeles Daily Journal

A Los Angeles County Superior Court judge recently appointed a receiver to run the business operations of a company that grows organic microgreens, finding the current management situation warranted third party oversight until an ownership dispute could be resolved.

Judge William D. Stewart said he intends to appoint David J. Pasternak to oversee World Organics LLC’s microgreens operation after an investor claimed the company was being run poorly. Unava LLC v. World Organics LLC, EC063114 (L.A. Sup. Ct., filed Nov. 4, 2014).

The case deals with a power struggle between a holding company controlled by Ara Abramyan – an ally of Russian President Vladimir Putin – and the businessmen who run World Organics. Abramyan’s company, Unava LLC, sued World Organics and its executives in November after the company said stakes Unava bought in World

Organics during two individuals’ bankruptcy proceedings were worthless.

Unava claims that it owned a 73 percent stake in World Organics, an assertion that the defendants contest. Fearing the defendants’ governance of the company to be lax, Unava’s attorney Bryan Sullivan, a partner at Early Sullivan Wright Gizer & McRae LLP, filed a motion to install the receiver.

Sullivan said that the two sides fundamentally disagreed about what happened in the lead-up to the case.

“We say they breached their fiduciary duties and they say we didn’t fund the company as promised,” he said. “We think we’ve presented more than enough evidence of mismanagement.”

World Organics’ lawyer Richard M. Foster did not immediately return request for comment.

Pasternak has yet to be sworn in officially as the receiver and said he was still not in a position to fully analyze the specifics of the case. He said receivers are commonly appointed in instances involving money disputes.