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” claims. According to the complaint, GenCanna delivered certain goods to the defendants. Allegedly, the defendants retained the goods but failed to pay for them. GenCanna specifically sues 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.
As averred in the complaint, an order was placed for CBD products by the Defendants, and as a usual practice, GenCanna reportedly generated a sales order and issued corresponding invoices contemporaneously with the shipment of CBD units. The payment term was “Net 30” days. Allegedly, the Defendants received and retained the goods, but “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. GenCanna further contends that “despite retaining the goods or deriving full benefit from them, the Defendants did not clear the invoice.” Thus, the Defendants allegedly “breached 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.