Safe Harbor says merger deal went sideways when payment was directed to a personal account | How to buy Skittles Moonrock online
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SHF wants to pay the individual shareholders and is worried last minute instructions aren’t above board.
Colorado-based SHF Holdings, Inc. (NASDAQ: SHFS) also known as Safe Harbor Financial agreed to buy Rockview Digital Solutions also known as Abaca in October 2022 for $30 million. The company agreed to make four payments to Rockviewās shareholders. According to the complaint, Daniel Roda was serving on behalf of the shareholders and overseeing the payments.
SHF said it had agreed to four separate payments earmarked to be paid by SHF to the former Rockview shareholders on the following dates: November 14, 2022; October 5, 2023; October 5, 2024; and October 5, 2025. As the company prepared to make the 2024 payment, it said it began communicating with Roda to get the details of the individual shareholders to make the payments to them through a bill.com portal. This is when things went sideways.
SHF claims that it didnāt get all the information it needed so it couldnāt make the payment on the planned date. Then Roda said he had a conflict of interest and had appointed a successor representative, James R. Carroll to oversee the payments. According to the complaint, Carroll said that he further appointed Gregory Ellis to act as an āagentā and Ellis would receive the gross payment of $3 million. Ellis would then make individual payments to the Rockview shareholders. He asked that the money be sent to his personal checking account which also had Roda and Carroll listed on the account. The complaint also states that the checking account had just been opened prior to the new instructions being sent.
It got even messier after that.
The complaint stated, āThereafter, Defendant Roda further complicated the shareholder payment process by attempting to reclaim the Representative role and then appointing he and Defendants Carroll and Ellis as joint āagentsā to receive the gross payment and then provided new wiring instructions to a personal account held jointly in their three names. It became quite clear that these cumulative actions ā over just a few days ā were most improper and that the Defendants had engaged in joint conduct that operated to prevent the Rockview shareholders from receiving the 2 payments due each of them.ā
The complaint also stated that Roda retitled the bank account name to try to address SHFās concerns. SHF maintains that Roda didnāt have the legal authority to make the appointments or try to reclaim his role according to the merger agreement.
SHF said it couldnāt accede to these demands prompting the lawsuit. It is asking the courts to declare that Roda didnāt have the authority to appoint a successor representative or request to have the money deposited into a personal checking account. The company wants to continue to make the payments to all of the shareholders without any interference.
Debra Borchardt
Debra Borchardt is the Co-Founder, and Executive Editor 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 Master’s degree in Business Journalism from New York University.
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