The NewAge Liquidator has sued NewAge’s former executive team for “substantial harm”.

The Defendants … brought financial devastation to the Company through their grossly negligent, reckless, and/or willful abdication of their fiduciary obligations and other unlawful conduct.

Named Defendants in the NewAge Liquidator’s May 31st Complaint include:

  • Frederick W. Cooper (below) – NewAge Board Member and a majority shareholder of Ariix prior to acquisition

  • Mark Wilson – NewAge President from November 2020
  • Brent Willis – NewAge CEO from April 2016 to January 2022
  • Timothy Haas – NewAge Board Member from 2017 to January 2022
  • Reginald Kapteyn – NewAge Board Member from 2017 to November 2020
  • Alicia Syrett – NewAge Board Member from January 2020 to January 2022
  • Gregory Gould – NewAge CFO from October 2018 to July 2021
  • Chuck Ence – NewAge CFO from October 2016 to August 2018
  • Carl Aure – NewAge CAO and SVP from December 2018 to October 2021
  • Kevin Manion – NewAge CFO from July 2021 to July 2022
  • Ed Brennan – NewAge Board Member since 2017 and Chairman of the Board since January 2022, also NewAge interim CEO from March 2022
  • Amy Kuzdowicz – NewAge Board Member from February 2019 and Audit Committee Chair
  • Greg Fea – NewAge Chairman of the Board from 2018 to 2022
  • Craig Thibodeau – NewAge VP of Key Accounts and President of International and Global Head of Private Label [sic]
  • Riley Timmer – former Ariix co-founder and COO, post-acquisition appointed to NewAge Global Head of Investor Relations (June 2021)

  • Tyler B. Jones – NewAge Vice President of Legal
  • KwikClick – publicly traded marketing company launched by Frederick Cooper, recently rebranded as “Kwik”
  • WenHang Zhang – KwikClick CIO
  • Jeffrey Yates – Kwikclick CFO and “Ariix Seller”
  • Brady Cooper – KwikClick Secretary
  • Ian Chandler – beneficial owner of KwikClick and former NewAge President of the Greater China region
  • Cooper Family Investments LP – owned by Frederick Cooper
  • Yates Family Investments LLLP – owned by Jeffrey Yates
  • Wilson Family Holdings LLC – owned by Mark Wilson
  • Timmer Family Investments LLLP – owned by Riley Timmer
  • Chandler Family Investments 2.0 LLC – owned by Ian Chandler

The NewAge Liquidator’s lawsuit pertains to manipulation of NewAge’s share price, “unjustified compensation” and “abandoned fiduciary obligations”.

These allegations mirror a lawsuit brought against some of the same corporate defendants by NewAge’s Chief Restructuring Officer last October.

The SEC has also gone after Brent Willis (right) for the same conduct.

In a nutshell (quoted from the NewAge Liquidator’s lawsuit);

The D&O Defendants with the Company between 2017 and 2020 embarked on a campaign of false and misleading public statements that manipulated NewAge’s share price.

“D&O Defendants” refers to Cooper, Wilson, Willis, Hass, Kapteyn, Syrett, Gould, Ence, Aure, Manion, Brennan, Kuzdowics, Fea and Thibodeau.

This campaign was led by Defendant, Brent Willis, NewAge’s Chief Executive Officer (“Willis”), who, dissatisfied with his own compensation and eager to boost his profile as an executive, set about creating the illusion of a successful and rapidly expanding business when NewAge was anything but.

The other D&O Defendant Board Members and executives with NewAge at that time were complicit in this scheme, either because they, too, directly participated and benefitted through unjustified compensation, or because they completely abandoned their fiduciary obligations to the Company and allowed the misstatements to be freely propagated.

Among other things, the misstatements issued by the D&O Defendants falsely claimed that NewAge had entered into various, expansive distribution agreements with global retail outlets that would dramatically increase the Company’s product sales and market share.

NewAge’s alleged misstatements pertained to their MLM companies; Ariix and Noni by NewAge.

In reality, however, the agreements provided for limited distribution to a handful of locations.

And even if the distribution agreements were as far reaching as claimed, NewAge lacked the financial wherewithal and inventory to satisfy such expansive distribution arrangements and the orders they would bring.

Other misstatements included lying about development of a CBD range of products, and other “promises NewAge could and would never deliver on”.

Those public statements, issued in press releases and proffered at industry trade shows, misrepresented the scope, progress
and true nature of the product development, which was nowhere near being brought to market.

The NewAge Liquidator alleges the public misstatements were “intentionally false and misleading”.

And while the contents of the statements were false, the net effect was very real. The D&O Defendants reaped substantial and unjustified financial rewards.

The NewAge Liquidator’s lawsuit seeks to claw the “unjustified financial rewards” back.

Specific examples and amounts cited in the NewAge Liquidator’s lawsuit include:

Brent Willis

In 2017, Willis received a salary of $300,000 and a bonus of $225,000 for a total of $525,000.

In 2018, Willis received a salary of $312,500, a bonus of $50,000, and other compensation totaling $22,449 for a total of $384,949.

In 2019, Willis received a salary of $650,000, a bonus of $312,845, restricted stock awards of $297,375, stock options of $796,220, and other compensation of $56,852 for a total of $2,113,292.

In 2020, Willis received a salary of $650,000, a bonus of $1,000,000, and other compensation of $115,528 for a total of $1,765,528.

Gregory Gould

In 2018, Gould received a salary of $67,708 and other compensation totaling $4,305 for a total of $72,013.

In 2019, Gould received a salary of $500,000, a bonus of $50,000, restricted stock awards of $1,845,500, stock option awards of $552,325, and other compensation of $35,822 for a total of $2,983,647.

In 2020, Gould received a salary of $500,000, a bonus of $250,000, and other compensation of $85,337 for a total of $835,337.

Timothy Haas

In 2017, Hass received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2018, Hass received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2019, Hass received $58,125 in cash and $100,000 in stock awards for a total of $158,125.

In 2020, Hass received $70,000 in cash and $100,000 in stock awards for a total of $170,000.

Reginald Kapteyn

In 2017, Kapteyn received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2018, Kapteyn received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2019, Kapteyn received $55,625 in cash and $100,000 in stock awards for a total of $155,625.

In 2020, Kapteyn received $59,063 in cash, $100,000 in stock awards, and $8,437 in other compensation for a total of $167,500.

Ed Brennan

In 2017, Brennan received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2018, Brennan received $17,500 in cash and $65,000 in stock awards for a total of $82,500.

In 2019, Brennan received $40,625 in cash and $100,000 in stock awards for a total of $140,625.

In 2020, Brennan received $70,000 in cash and $100,000 in stock awards for a total of $170,000.

Amy Kuzdowicz

In 2019, Kuzdowicz received $55,625 in cash and $100,000 in stock awards for a total of $155,625.

In 2020, Kuzdowicz received $77,500 in cash and $100,000 in stock awards for a total of $177,500.

Greg Fea

In 2017, Fea received $42,500 in cash and $65,000 in stock awards for a total of $107,500.

In 2018, Fea received $42,500 in cash and $65,000 in stock awards for a total of $107,500.

In 2019, Fea received $151,875 in cash and $100,000 in stock awards for a total of $251,875.

In 2020, Fea received $187,500 in cash and $100,000 in stock awards for a total of $287,500.

While the NewAge Liquidator’s lawsuit names additional defendants, as it stands we now have three lawsuits active pertaining to the same conduct.

Typically regulatory lawsuits take precedence over civil actions. How the additional defendants will factor in I’m not sure of.

I’ve added the NewAge Liquidator’s lawsuit to BehindMLM’s case calendar, so stay tuned for updates as we continue to track the case.

For reference, NewAge came out the other side of its Chapter 11 bankruptcy under the ownership of John Wadsworth.

In March 2023, NewAge rebranded its MLM operations as PartnerCo.

 

Update 5th June 2023 – The previously filed lawsuit by NewAge’s Chief Restructuring Officer was dismissed on June 1st.

This appears to be a procedural closure in light of the NewAge Liquidator’s lawsuit.