Bankrupt GenCanna Sues Creditors For Unpaid Hemp Products, Seeks to Recover $1.7M For Alleged Unjust Enrichment and Breach
April 1, 2021, Eastern District of Kentucky – Bankrupt hemp-derived cannabinoids company OGGUSA, Inc. (f/k/a GenCanna Global USA, Inc.) (“GenCanna” or the “Debtor” and, with OGG, Inc. and Hemp Kentucky, LLC, the “Debtors”) recently initiated adversary proceedings against five defendants, alleging breach of contract and unjust enrichment. GenCanna allegedly delivered certain goods to the defendants. The defendants retained the goods but failed to pay for them. GenCanna specifically sued Real Remedy, LLC, CAD Media LLC, CBD Unlimited LLC, Theorem 12, LLC, and Blue Moon Hemp, Inc. (collectively, the “Defendants”).
Before their bankruptcy proceedings, the Debtors were a vertically integrated agriculture technology company that cultivated hemp plants and processed them into products containing hemp-derived substances, such as cannabidiol (“CBD”) oils and other hemp-derived cannabinoids products.
According to the papers filed with the court, an order was placed for CBD products by the Defendants. As a usual practice, GenCanna generated a sales order and issued corresponding invoices contemporaneously with the shipment of CBD units. The Defendants received and retained the goods. The payment term was “Net 30” days. Despite retaining the goods or deriving full benefit from them, the Defendants did not clear the invoice, even after receiving demand letters for the due amounts.
GenCanna brought an action for breach of contract, alleging that the quote, sales order, and invoice were a binding, enforceable contract requiring the Defendants to pay the invoiced purchase price for the goods that GenCanna shipped to them. Thus, GenCanna alleges that the Defendants are in breach of their contractual obligations and were unjustly enriched at GenCanna’s expense by retaining the products without making their due payment.
The case is In re OGGUSA, Inc. in the United States Bankruptcy Court for the Eastern District of Kentucky under case number: 20-50133-grs. Judge Gregory R. Schaaf is overseeing the Debtors’ bankruptcy case. Dentons Bingham GreenBaum LLP and Benesch, Friedlander, Coplan, and Aronoff, LLP are the counsels for the Debtors.