Digital Banking Platform Greenwood Sued By The Founders Of The Gathering Spot
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Greenwood, a black-owned digital banking platform, has been sued by The Gathering Spot’s founders, a members-exclusive club targeting black professionals. The lawsuit is connected to a $50 million acquisition that was announced in May last year.
Greenwood sued by The Gathering Spot
The founders of the Gathering Spot are Ryan Wilson and T’Keel Petersen. The two have filed a lawsuit at the Fulton County Superior Court against the CEO of Greenwood, Ryan Glover. The lawsuit also targets board member Dr. Paul Judge.
The plaintiffs claim that Greenwood did not offer payments on a $5 million earn-out agreement deal. The filing has also questioned the solvency of Greenwood after Petersen announced that he was leaving the company and was being replaced by Mike McCloskey. The switch has also triggered outrage from TGS.
According to the lawsuit, Greenwood participated in intentional misconduct that constituted a material breach of the purchase agreement deal. It has also been determined that the defendant in the lawsuit will still commit material breaches on this purchase agreement deal.
Wilson and Petersen are seeking millions of dollars worth of damages. They also want to regain control over the ownership of The Gathering Spot. The acquisition deal between Greenwood and The Gathering Spot was named one of the greatest deals in Atlanta, and it was seen as an example of Black-owned businesses uniting to achieve growth.
Greenwood is a platform that was founded in 2020, and it has already raised $88 million from some of the largest names in the VC world, such as Citi Ventures, Trust Ventures, Bank of America, and Wells Fargo.
The digital banking platform gives its customer access to Mastercard-branded debit cards, savings accounts, and other services. The platform has also promoted itself as a platform targeting black and Latino individuals and businesses.
Greenwood responds to the lawsuit
Greenwood has denied the claims made by TGS in this lawsuit. The company has countersued, alleging that the founders of TGS did not accurately represent their finances, resulting in unforeseen obligations of more than $27 million.
The tense relationship between Greenwood and TGS became evident earlier this year after Wilson alleged that Greenwood breached the purchase agreement. In June, Greenwood filed a countersuit claiming that Wilson, Petersen, and other shareholders at TSG misinterpreted the contract agreement.
In July, Wilson claimed that Greenwood failed to pay an earn-out payment to TGS shareholders and failed to settle any bonuses for 2022. The complaint also noted that Glover and Judge used these funds to award themselves more bonuses. According to Wilson, Greenwood’s failure to pay is attributed to financial issues that could result in insolvency.
The Gathering Spot boasts one of the largest communities of business people, with over 12,000 members. TTGS has locations in Atlanta and Los Angeles. Wilson and Petersen have a significant presence in the black tech ecosystem as they were awarded the Phoenix Award, which is the greatest honor in the city.
