The dust may have settled on the initial outrage over abrupt closure of RealEats, the meal delivery service that employed more than 115 employees in Geneva, but that doesn’t mean it’s forgotten.
RealEats executives have been accused of using fraudulent behavior to induce investment and failing to disclose the financial peril faced by the company to those investors.
Now, a complaint has been filed in state Supreme Court in Ontario County by Real Bridge LLC of Indianapolis, who says RealEats CEO Dan Wise and CFO Rebecca Holderread fraudulently painted an “exceedingly rosy picture” and planned to use any investment to pay down personal liability to a senior lender.
In fact, Real Bridge alleges that no one from RealEats ever indicated that the business was on the brink of closure.
The business was forced to shut down because a senior lender ‘exercised its legal right to take control’ of RealEats bank account. Weeks before RealBridge wired $450,000 to RealEats as part of a promissory note.
This was part of millions that RealEats had secured in investor funding. The complaint further notes that Real Bridge was unaware that any lenders had ‘sweep access’ to the company’s bank accounts.
The complaint says the company knew it was in ‘dire financial straits’ and failed to disclose that to investors.
Even as of January 4, 2023 CEO Wise continued painting a glowing picture of the company’s financial situation. That email pointed to an 18.2% increase in revenues in 2022, projecting $21.3 million.
The company also faces a federal lawsuit over mass layoffs, which occurred before a WARN Act notice had been released. Anytime an employer with 50 or more workers is going to lay off employees, it’s required to file a WARN Act notice. In this case, the notice came days after the layoffs were completed.
The WARN Act creates a 60 to 90 day buffer, depending on exact circumstance, for employees to know the mass layoff is coming.
Josh is the president and publisher of FingerLakes1.com. Have a question? Send them to [email protected].