2nd Amendment countersuit nuEra Cannabis(entities), Rob and Bob Fitzsimmons, and Laura Jaramillo Bernal lost to J. Phelan and Finch

The 2nd Amendment countersuit they lost to J. Phelan and Finch

IN THE CIRCUIT COURT OF COOK COUNTY COUNTY DEPARTMENT – LAW DIVISION JOSEPH PHELAN, JUAN FINCH, JR., RYAN PHELAN, Individually and Derivatively on Behalf of UNION CITY HOLDING LLC and UNION CITY PRODUCTIONS LLC, Plaintiffs, vs. NUMED PARTNERS, LLC; NUMED MANAGERS INCORPORATED; NUERA NEW BUFFALO, LLC; NUMED PARTNERS MICHIGAN, LLC; NE MI, LLC; NUERA EAST PEORIA, LLC; NUERA PEKIN, LLC; NUERA URBANA, LLC; NUERA AURORA, LLC; NUERA CHICAGO, LLC; NUERA ACQUISITIONS, LLC; IESO, LLC; TB NUERA JV LLC; ROBERT V. FITZSIMMONS; ROBERT FITZSIMMONS, JR.; SHEILA FITZSIMMONS; PATRICK BRADY; LAURA JARAMILLO BERNAL; PATRICK COATS; DIVINA CAPELLUPPO; THOMAS VANCE; ANDY DAMICO and KENNETH SLEPICKA, Defendants. ROBERT V. FITZSIMMONS II, NUMED MANAGERS, INC., ROBERT FITZSIMMONS III, LAURA JARAMILLO BERNAL, IESO, LLC, NUMED EAST PEORIA LLC, NUMED URBANA LLC, NUMED CHICAGO LLC, NUERA DEKALB LLC, NUERA EAST DUBUQUE LLC, AND NUERA CHICAGO SOUTHLAND LLC, Counter-Plaintiffs, vs. RYAN PHELAN, JOSEPH PHELAN, and JUAN FINCH, Counter-Defendants. Case No.: 2023 L 008973 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) SECOND AMENDED COUNTERCLAIM FOR DECLARATORY JUDGMENT AND OTHER RELIEF 4902-9680-7799, v. 3 Counter-Plaintiffs, Robert V. Fitzsimmons II, NuMed Managers, Inc., Robert Fitzsimmons III, Laura Jaramillo Bernal, Ieso, LLC, nuMed East Peoria LLC, nuMed Urbana LLC, nuMed Chicago LLC, nuEra DeKalb LLC, nuEra East Dubuque LLC, and nuEra Chicago Southland LLC, by their attorneys, Robert S. Minetz and Latimer LeVay Fyock LLC, for their Amended Counterclaim for Declaratory Judgment and for Other Relief against Counter-Defendants, Ryan Phelan, Joseph Phelan, and Juan Finch, state as follows: PARTIES 1. Counter-Plaintiff Robert V. Fitzsimmons II (“Fitzsimmons II”) is an individual and resident of the State of Indiana. Fitzsimmons II is the manager of Union City Holding LLC and Union City Productions LLC. 2. Counter-Plaintiff NuMed Managers, Inc. is an Illinois corporation with its principal place of business in Chicago, Illinois. NuMed Managers, Inc. is the manager of nuEra New Buffalo LLC, NE MI LLC, nuEra East Peoria LLC, nuEra Urbana LLC, nuEra Chicago LLC, IESO, LLC, TB nuEra JV LLC, and other cannabis businesses. 3. Counter-Plaintiff Robert Fitzsimmons III (“Fitzsimmons III”) is an individual residing in the State of Illinois. Fitzsimmons III is incorrectly identified in Plaintiff’s Complaint as “Robert Fitzsimmons, Jr.” 4. Counter-Plaintiff Laura Jaramillo Bernal (“Bernal”) is an individual residing in the State of Illinois. 5. Counter-Plaintiff Ieso, LLC is a licensed cannabis grow and process facility located at 3235 New Era Road, Murphysboro, Illinois 62966. 6. Counter-Plaintiff nuMed East Peoria LLC is a licensed cannabis dispensary with locations at 3249 Court Street, Pekin, Illinois 61554 and 504 Riverside Drive, East Peoria, Illinois 61611. 4902-9680-7799, v. 3 2 7. Counter-Plaintiff nuMed Urbana LLC is a licensed cannabis dispensary with locations at 105 E. University Ave., Urbana, Illinois 61801 and 102 E. Green St., Champaign, Illinois 61820. 8. Counter-Plaintiff nuMed Chicago LLC is a licensed cannabis dispensary with locations at 1308 W North Ave., Chicago, Illinois 60642 and 1415 Corporate Blvd., Aurora, Illinois 60502. 9. Counter-Plaintiff nuEra DeKalb LLC is a licensed cannabis dispensary located at 818 W. Lincoln Hwy., Space #7, DeKalb, Illinois 60115. 10. Counter-Plaintiff nuEra East Dubuque LLC is a licensed cannabis dispensary located at 20170 U.S. Hwy. 20 W., East Dubuque, Illinois 61025. 11. Counter-Plaintiff nuEra Chicago Southland LLC is a licensed cannabis dispensary located at 16950 S. Halsted Street, Harvey Illinois 60426. 12. Illinois. 13. Counter-Defendant Ryan Phelan (“R. Phelan”) is an individual residing in Chicago, Counter-Defendant Joseph Phelan (“J. Phelan”) is an individual residing in Chicago, Illinois. 14. Upon information and belief, Counter-Defendant Juan Finch (“Finch”) is an individual residing in Florida. COUNT I (Declaratory Judgment against Ryan Phelan) 15. Counter-Plaintiff Fitzsimmons II incorporates by reference Paragraphs 1 and 12 above as though fully set forth herein as paragraph 15 of this Count I of his Counterclaim. 16. An actual controversy exists between Fitzsimmons II and R. Phelan about the ownership of Union City Holding LLC (“UCH”) and Union City Productions LLC (“UCP”). 4902-9680-7799, v. 3 3 17. In order to resolve this controversy, Counter-Plaintiff Fitzsimmons II requests the Court to enter a Declaratory Judgment pursuant to 735 ILCS 5/2-701. FACTS COMMON TO COUNT I 18. July 25, 2019. 19. UCH was formed as a limited liability under the laws of the State of Michigan on Prior to December 30, 2024, Fitzsimmons II and R. Phelan were the sole members of UCH, with Fitzsimmons II having a 66.66% membership interest and R. Phelan having a 33.33% membership interest in UCH. 20. 25, 2019. 21. UCP was formed as a limited liability under the laws of the State of Michigan on July Prior to December 30, 2024, Fitzsimmons II and R. Phelan were the sole members of UCP, with Fitzsimmons II having a 66.66% membership interest and R. Phelan having a 33.33% membership interest in UCP. 22. As set forth in their respective Operating Agreements, UCH’s and UCP’s “purpose and the nature of its business shall be to own and operate business interests related to the cultivation, extraction, infusion, distribution and sale of marijuana pursuant to the Michigan Medical Marihuana Act (“MMA”) and the Michigan Regulation and Taxation of Marihuana Act (“Michigan Adult Use Act”) and perform any and all lawful acts incidental to the foregoing purpose or reasonably necessary to the fulfillment of the foregoing purpose, including establishing a cooperative or shared equity platform that would allow the Manager or its affiliates to maximize distribution capability and tax efficiency to the extent permitted by law.” 23. At all times, Fitzsimmons II has been the sole Manager of both UCH and UCP (UCH and UCP are sometimes referred to herein, collectively, as the “Companies”). 4902-9680-7799, v. 3 4 24. Section 9.8 of the UCH Operating Agreements, titled “Demand for Buyout,” sets forth the procedures by which any member of UCH may purchase the membership interest of any other member of the limited liability company. 25. Section 9.8 of the UCP Operating Agreements contains the identical language as in the UCH Operating Agreement regarding a buyout by one member of the limited liability company of another member’s membership interest. 26. Pursuant to Section 9.8(a) of the Companies’ Operating Agreements: (a) From and after such date which two (2) years after the date of this Agreement, any Member may give to the remaining Member (the “Responding Members”) a notice of intention to sell such Member’s Membership Interest in the Company, or in the alternative to purchase the Membership Interest of the other Member in the Company (a “Buy/Sell Notice”). The Buy/Sell Notice shall state the Member giving such notice (the “Initiating Member”) desires to either sell such Member’s Membership Interest in the Company, or to purchase the Membership Interest of the Member of the Company, and shall set the price, prorated on the basis of the Participating Percentage of each Member (the “Sales Price”) which the Initiating Member will pay to the Responding Member for its entire Membership Interest in the Company. The Buy/Sell Notice shall also list the mortgages and other liens and encumbrances which shall continue as liens against the Property and/or the Membership Interest following the closing. The Responding Member shall have a period of sixty (60) days after the receipt of the Buy/Sell Notice within which to notify the Initiating Member in the writing (the “Reply Notice”) whether the Responding Member shall either (i) sell to the Initiating Member all of its respective Membership Interests in the Company at the Sales Price; or, (ii) buy the Initiating Member’s entire Membership Interests in the Company at the Sales Price. In the event that the Reply Notice is not so given prior to the expiration of the sixty (60) day period, then it shall be conclusively presumed that the Responding Member has agreed to sell all of its Membership Interests to the Initiating Member at the Sales Price, and the Initiating Member shall purchase all of the Membership Interests of the Responding Member at the Sales Price. If the Responding Member elects to purchase the Initiating Member’s Membership interest, such Responding Member shall contribute the funds necessary for the Sales Price. 27. Section 9.8 of the Operating Agreements further specifies, among other matters, the timing required for payment of the purchase price, the method of payment, a requirement that the selling Member deliver to the purchasing Member a release or an indemnification agreement. 4902-9680-7799, v. 3 5 28. In addition, Section 9.8(e) of the Operating Agreements contains a requirement that if there are any outstanding loans by a selling Member to the Company, such loans shall be purchased by a purchasing Member as a condition of the sale, and states as follows: (e) In connection with the sale of one Member’s Membership Interest to the other, if there shall be outstanding loans by the selling Member to the Company such loans, including accrued or unpaid or accumulated interest, shall be purchased at par by the purchasing Member as a condition precedent to such sale. The purchase price for such loans shall be paid by (i) certified or cashier’s check drawn to the order of the selling Member; or, (ii) by wire transfer. At the closing, the selling Member shall deliver to the purchasing Member a note and bond evidencing such loans and all documents securing the same and an assignment or satisfaction, at purchasing Member’s option, thereof. 29. Section 9.8(e) also provides that the requirements or obligations under Article IX shall be enforceable by an action for specific performance. 30. On October 29, 2024, Fitzsimmons II, through his counsel, as 66% owner of the Companies sent a Buy/Sell Notice pursuant to Section 9.8 of the respective Operating Agreements to R. Phelan to purchase his 33% ownership interest in the Companies (the “Buy/Sell Notice”). A true and correct copy of Fitzsimmons II’s October 29, 2024 Buy/Sell Notice is attached as Exhibit 1. 31. After taking into account the debts owed by the Companies to Fitzsimmons II, the Buy/Sell Notice provides that the total value of the membership interests in the Companies is $300.00, and thus R. Phelan’s prorated portion thereof was valued at $100.00 (the “Sales Price”). 32. Alternatively, as set forth in Section 9.8(e) of the Operating Agreements, the Buy/Sell Notice states that R. Phelan may purchase Fitzsimmons II’s membership interests in the Companies and if he so elects, he must first satisfy the outstanding loans by the Companies to Fitzsimmons II totaling $4,062,295.07, in addition to payment of the $200.00 for his 66% membership interests. 4902-9680-7799, v. 3 6 33. Pursuant to the terms of the Operating Agreements, R. Phelan was required to respond to the Buy/Sell Notice within 60 days from receipt thereof and notify Fitzsimmons II of whether he elects to accept the offer and agrees to sell all of his membership interests in the Companies to Fitzsimmons II for the Sales Price, or whether he elects to purchase Fitzsimmons II’s membership interests in the Companies. 34. If R. Phelan did not respond to the Buy/Sell Notice within the 60-day period, the Operating Agreements state that it is conclusively presumed that the Responding Member (R. Phelan) has agreed to sell all of its membership interests to the Initiating Member (Fitzsimmons II) at the Sales Price. 35. On December 27, 2024, R. Phelan sent correspondence to Fitzsimmons II advising him that the offer to purchase his membership interests was rejected and declining to elect to purchase Fitzsimmons II’s membership interests in the Companies. A true and correct copy of R. Phelan’s December 27, 2024 letter is attached as Exhibit 2. 36. On or about December 30, 2024, Fitzsimmons II, through his counsel, sent correspondence to R. Phelan advising him that his failure to deliver a valid Reply Notice (as defined in the Operating Agreements) to the Buy/Sell Notice required by Section 9.8 of the Operating Agreements conclusively resulted in his agreement to sell his membership interests in the Companies to Fitzsimmons II and his failure to respond also indicated he elected not to purchase Fitzsimmons II’s membership interests in the Companies. A true and correct copy of the December 30, 2024 correspondence to R. Phelan is attached as Exhibit 3. 37. Enclosed with the December 30, 2024 correspondence was a certified check in the amount of $100.00 representing the Sales Price and an Assignment and Assumption of Membership Interests (the “Assignment”) for R. Phelan to execute formalizing the transfer of his membership interests to Fitzsimmons II. 4902-9680-7799, v. 3 7 38. On January 2, 2025, R. Phelan sent correspondence to Fitzsimmons II returning the $100.00 check. A true and correct copy of the January 2, 2025 letter is attached as Exhibit 4. 39. R. Phelan no longer has any membership interests in the Companies because he declined to sell his membership interests and also refused to purchase Fitzsimmons II’s membership interests in response to the Buy/Sell Notice. 40. The Operating Agreements provide that R. Phelan’s failure to either agree to sell his membership interests to Fitzsimmons II or to purchase Fitzsimmons II’s membership interests in the Companies amounts to an agreement to sell all of R. Phelan’s interests in the Companies to Fitzsimmons II and Fitzsimmons II is required to purchase R. Phelan’s interests at the Sales Price. 41. Fitzsimmons II’s delivery of the Buy/Sell Notice in accordance with Section 9.8 of the Companies’ Operating Agreements is a proper exercise of his right to initiate the process that results in the purchase and sale of membership interested, with R. Phelan, as the Responding Member, electing to buy or sell at the stated price. 42. By operation of Section 9.8 of the Operating Agreement, R. Phelan’s refusal to elect either to buy Fitzsimmons II’s interests in the Companies or to sell his own interest in the Companies constitutes R. Phelan’s agreement to sell his interests in the Companies to Fitzsimmons II for the Sales Price. 43. Fitzsimmons II tendered the Sales Price to R. Phelan and R. Phelan has refused to sell his interests in the Companies. R. Phelan returned the payment and refused to execute the Assignment formalizing the transfer of his membership interests in the Companies to Fitzsimmons II. At the same time, R. Phelan refused to buy Fitzsimmons II’s membership interests and rejected the validity of the buy/sell process and the enforceability of Section 9.8 of the Operating Agreements, in breach of his obligations under the Operating Agreements. 4902-9680-7799, v. 3 8 44. R. Phelan signed each of the Operating Agreements indicating his agreement to the terms contained therein, including Section 9.8 regarding the parties’ buyout rights and obligations. 45. Section 4.4 of the Operating Agreements provides that each Member agrees to indemnify the Company and each of its other Members against all liability, loss, cost, damage and expenses, including attorneys’ fees and costs incurred, which the Company or other Member shall sustain relating to or arising out of an alleged breach by the indemnifying Member of any representation, warranty or covenant made by the indemnifying Member in the Operating Agreements. 46. R. Phelan’s refusal to acknowledge Fitzsimmons II’s purchase of his membership interests in the Companies and to execute and deliver the Assignment to Fitzsimmons II, coupled with his rejection of the validity of the buy/sell process and the enforceability of Section 9.8 of the Operating Agreements, has given rise to an actual controversy as to the ownership of Union City Holding and Union City Productions, which can be resolved only through the declarations of this Court. WHEREFORE, Counter-Plaintiff, Robert V. Fitzsimmons II, prays that this Honorable Court enter the following relief on Count I of his Counterclaim: A. Declare that Ryan Phelan no longer has any membership interests in Union City Holding LLC or Union City Productions LLC and that Robert V. Fitzsimmons II owns 100% of the membership interests in both entities; B. Declare that Ryan Phelan’s membership interests in Union City Holding LLC and Union City Productions LLC were transferred effective as of December 27, 2024 pursuant to Robert V. Fitzsimmons II’s exercise of his rights under Section 9.8 of the Operating Agreements; 4902-9680-7799, v. 3 9 C. Compel Ryan Phelan to execute and deliver the Assignment and Assumption of Membership Interests evidencing the transfer of his 33% membership interests in Union City Holding LLC and Union City Productions LLC to Robert V. Fitzsimmons II; D. Enter a judgment in favor of Counter-Plaintiff, Robert V. Fitzsimmons II, against Counter-Defendant, Ryan Phelan, in the amount of Counter-Plaintiff’s attorneys’ fees, costs and related expenses incurred in bringing this action; and E. 47. Award such other and further relief as this Court deems reasonable and just. FACTS COMMON TO COUNTS II, III, and IV NuMed Managers, Inc. is the manager of numerous cannabis-related entities which originally used the name “NuMed” in the entity names, however, the company was rebranded as “nuEra” in 2020 when Illinois transitioned from a medical-only cannabis market to a medical and adult use market. Thereafter, many of the entities originally using “NuMed” in the entity names (e.g. NuMed Chicago LLC) now operate under assumed names using nuEra in place of NuMed (e.g. NuMed Chicago LLC’s assumed name is nuEra Chicago). The entities are collectively referred to herein as “nuEra” or the “nuEra Entities.” 48. Counter-Plaintiffs Fitzsimmons II, nuEra, Fitzsimmons III, Bernal, Ieso, LLC, nuMed East Peoria LLC, nuMed Urbana LLC, nuMed Chicago LLC, nuEra DeKalb LLC, nuEra East Dubuque LLC, and nuEra Chicago Southland LLC, (collectively, “Counter-Plaintiffs”) and their affiliates own and operate vertically integrated cannabis companies involved in the cultivation, production, distribution, and dispensary sales of cannabis products. 49. nuEra operates cannabis cultivation centers in Illinois and Michigan and cannabis dispensaries in Illinois and prides itself on the quality and purity of nuEra’s products, using lab testing to ensure compliance with state regulations and providing transparency about cannabinoid content and the absence of harmful contaminants. 4902-9680-7799, v. 3 10 50. nuEra also focuses on sustainability in its growing practices and on community engagement by offering educational resources and participating in social equity programs designed to help those affected by the historical criminalization of cannabis, which has disproportionately affected minority communities. 51. In or around 2019, R. Phelan and Fitzsimmons entered into business discussions whereby in exchange for Fitzsimmons II’s operations experience and financial investment in Union City Holding LLC and Union City Productions LLC, R. Phelan agreed to make Fitzsimmons II the 66.6% majority owner in each of UCH and UCP, with R. Phelan being the 33.3% minority owner in each entity, for purposes of operating a licensed cannabis grow facility located in in Union City, Michigan. 52. J. Phelan is R. Phelan’s brother and became acquainted with Fitzimmons and nuEra. Beginning sometime in 2019, J. Phelan worked as a sales manager relating to sales of products from the Michigan cultivation center. 53. 54. Finch is a personal acquaintance of the Phelans. Finch previously expressed interest in obtaining a Conditional Adult Use Dispensing Organization License pursuant to the Illinois Cannabis Regulation and Tax Act. Believing it would be useless for him to do so because of residency requirements, he did not apply for a license. 55. Instead, Finch filed a lawsuit against The Illinois Department of Financial and Professional Regulation raising a constitutional challenge to the residency provisions in the licensing regime. Finch also moved for a preliminary injunction halting the completion of the licensing process for the allocated 2021 licenses and enjoining the process for the issuance of the 2022 licenses. See Finch et al. v. Treto, Case No. 1:22-cv-01508 filed in the U.S. District Court for the Northern District of Illinois. 4902-9680-7799, v. 3 11 56. In or around March 2022, J. Phelan allegedly overheard an unknown individual at a bar say that IESO, LLC (“IESO”), an Illinois-based cannabis cultivation and production company, was for sale, which fact was already known to nuEra at the time. 57. J. Phelan claimed that he brought the opportunity to acquire IESO to Fitzsimmons II’s attention, after which time Fitzsimmons II and nuEra entered into negotiations for nuEra to acquire IESO. 58. J. Phelan falsely claimed that Fitzsimmons II promised that he would receive a 1/3 ownership interest in any company that nuEra ultimately acquired due to his “consulting efforts.” 59. J. Phelan alleges that in lieu of giving him 1/3 ownership interest in IESO, should nuEra’s acquisition of it be consummated, that Fitzimmons II offered him a 3% interest in nuEra (including IESO, LLC) and a $500,000 yearly salary, with J. Phelan and R. Phelan retaining their interests in UCH and UCP, and J. Phelan continuing to seek new business opportunities for the nuEra businesses. 60. No such agreement between Fitzsimmons II, nuEra, and J. Phelan in fact existed and J. Phelan’s claims that nuEra was supposed to prepare contracts memorializing the alleged agreements are false. 61. No contracts or other documents exist purporting to memorialize the claims made by J. Phelan as to the interest he was supposed to acquire in IESO, nuEra or the financial compensation J. Phelan alleges nuEra agreed to pay him. 62. Thereafter, the relationship between J. Phelan and Fitzsimmons II, and nuEra deteriorated, and the parties terminated any further business involvement. 63. J. Phelan was the primary contact with nuEra and Fitzsimmons II and R. Phelan had very little communication directly with nuEra and Fitzsimons. 4902-9680-7799, v. 3 12 64. After the breakdown in the relationship between J. Phelan and nuEra and Fitzsimmons, the relationship between R. Phelan and Fitzimmons II similarly deteriorated, with R. Phelan accusing Fitzsimmons II of acting in violation of his duties as the majority owner and Manager of UCH and UCP and eventually the filing of this lawsuit. 65. After the business relationship ended, J. Phelan commenced a concerted smear campaign against Fitzsimmons II, nuEra, their affiliated companies, and other members of the Fitzsimmons family, including Fitzsimmons III and Bernal, and has repeatedly published defamatory per se comments on multiple media sources falsely accusing Counter-Plaintiffs of engaging in unethical, fraudulent, racist, sexist, criminal, and other offensive business practices while operating their cannabis companies, including, but not limited to on: a. b. c. d. e. LinkedIn; Reddit; a media venture including his website available at www.fnaround.com; a website dedicated www.nueraclassaction.com; to disparaging nuEra available at a “media management” company named “312all” and website available at www.312all.com; and f. 66. a startup finance company named VIDEAC. In addition, J. Phelan hosts a podcast titled “F’N Around” which is distributed through major streaming platforms, including Apple Podcasts, Spotify, iHeart radio, and YouTube. 67. J. Phelan has used his LinkedIn profile to regularly promote his claims that Counter-Plaintiffs engage in unethical, fraudulent, racist, and other offensive business practices, with his profile identifying himself as: Cofounder of VIDEAC & 312ALL | Marijuana & Finance Industry Strategist | Defrauded Partner of nuEra Cannabis | Advocate for Justice | Exposing nuEra Cannabis Fraud, Racism, & Unethical Practices in Illinois and Beyond. See Exhibit 5 attached hereto. 4902-9680-7799, v. 3 13 68. The references by J. Phelan in the attached Exhibits to “NuEra Cannabis” and to “Nu Era” are references to the Counter-Plaintiffs ROBERT V. FITZSIMMONS II, NUMED MANAGERS, INC., ROBERT FITZSIMMONS III, LAURA JARAMILLO BERNAL, Ieso, LLC, nuMed East Peoria LLC, nuMed Urbana LLC, nuMed Chicago LLC, nuEra DeKalb LLC, nuEra East Dubuque LLC, and nuEra Chicago Southland LLC. 69. J. Phelan has engaged in numerous efforts to disrupt Counter-Plaintiffs’ business operations and to harm nuEra’s professional reputation, including, but not limited to: a. orchestrating attacks against nuEra on social media accounts across multiple platforms, leading to the permanent suspension of several of nuEra’s social media accounts and significantly harming nuEra’s operations, which rely heavily on digital advertising; b. dispensaries; c. urging other operators in the cannabis industry to boycott nuEra contacting job posting websites and recruiters, such as Indeed, to discourage potential employees from considering potential job opportunities with nuEra; d. alleging that nuEra and Fitzsimmons II manipulated legal processes to delay and obstruct certain licensing opportunities, specifically harming minority applicants in Illinois; and e. alleging that nuEra and Fitzsimmons II have engaged in improper or illegal efforts to “silence” J. Phelan’s statements about nuEra, including that Fitzsimmons II illegally hacked his cell phone to specifically delete texts between the two parties in an effort to destroy evidence in support of J. Phelan’s claims against nuEra, in addition to bribing and/or intimidating witnesses affiliated with J. Phelan. 4902-9680-7799, v. 3 14 70. Specifically, and in addition to other false and inflammatory statements made across various media platforms, Counter-Defendants published the following statements: a. In J. Phelan’s LinkedIn post dated October 24, 2024, he accused nuEra of engaging in unethical or illegal actions related to tax filings, potential violations of Securities and Exchange Commission regulations, and misconduct by its attorneys, stating: After years of asking, our team finally received our first K-1 tax forms this year. I know, it’s 2024, and that’s a lot of back tax drama! But here’s the kicker: no K-1s were ever delivered before the lawsuit. Curious, right? I mean, it’s almost like someone wanted to keep certain losses to themselves… Makes you wonder who their CFO is and who’s really responsible for that tax liability? If you’re wondering how sketchy this gets, let’s take a trip down memory lane: Enron famously hid its financial losses by creatively keeping info off the books. Their K-1s were probably more like “Don’t Look-1s.” Then there was Bernie Madoff, who was less of a tax filer and more of a tax dodger, keeping partners in the dark while the IRS lit up his mailbox. And who can forget Tyco International, where executives conveniently forgot to share their K-1s while funneling cash through personal piggy banks? So what kind of illegality are we talking about here? Well, with an ARDC: Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois complaint already filed, Security Exchange Commission meetings in the works, and the Internal Revenue Service now joining the fun, this situation’s starting to look like a regulatory mixer—and all because we dared to ask for the truth! See Exhibit 6 attached hereto. b. J. Phelan’s LinkedIn post from September 2024 alleged that nuEra engaged in unethical recruiting practices by manipulating its Indeed business page to mislead potential hires, stating: It seems their past reputation has followed them, an update on the supposed unethical employee recruiting practice by nuEra Cannabis. Thankfully, Indeed is now aware of this deceptive practice and is investigating the matter to protect their users. The matter: “Speaking of surprises, I woke up to some anonymous information today that revealed my partners at nuEra Cannabis have such a poor employee reputation that they’ve created a completely new company page on Indeed to mislead potential hires. See Exhibit 7 attached hereto (emphasis added). 4902-9680-7799, v. 3 15 c. The summary of episodes 1-3 of J. Phelan’s F’n Around podcast states, in part, as follows: [Joseph Phelan] recounts how the company lured him in with promises and contracts of ownership, salary, and partnership, only to betray him and steal his Interstate 420 brand—replacing their offensive Underground Railroad concept. The episode then introduces his start to the story including Juan Finch Jr’s involvement, another victim suing for NuEra’s manipulation, who was promised a dispensary that never materialized. Joe gives his opinion on Juan’s experience to highlight the company’s consistent exploitation of partners and exclusion of minorities from the cannabis industry. See Exhibit 8 attached hereto (emphasis added). d. Finch published a “press release” which is also restated on the nuEra Website maintained by J. Phelan, and republished on J. Phelan’s LinkedIn page, stating that: Juan Finch, Jr. exposes Nuera Cannabis (formerly numed) for their part in JB Pritzker’s social equity license program delay Chicago, IL - Juan Finch Jr., a retired United States Navy veteran, has taken legal action against Nuera Cannabis, a prominent player in the cannabis industry, for breach of contract and fraud. Finch, who was initially interviewed by Laura Jaramillo Bernal of Mariworks LLC and Nuera Cannabis (Brands made are Nuera, Interstate 420, Midweek Friday, Riseau, and Alchemy) to apply for a cannabis license in Illinois, has come forward to expose the company’s unethical practices in pursuit of profit. After discovering that one of the key requirements for the license was being a state resident for at least five years, Finch was informed that the law of JB Pritzker’s Social Equity program was deemed unconstitutional. However, Nuera Cannabis, led by CEO Bob Fitzsimmons, orchestrated and funded a legal battle against Mario Treto Jr. of the State of Illinois using Juan Finch Jr. (in exchange for a promised dispensary license) as their pawn and face to challenge this ruling, causing delays for license winners and hindering minorities from using their licenses in the state. See Exhibit 9 attached hereto (emphasis added). e. Finch also published a statement which was allegedly sent to reporters, journalists, politicians, and cannabis industry players in the United States and Canada which stated in part: 4902-9680-7799, v. 3 16 My name is Juan Finch Jr. Upon retiring from the United States Navy, I began researching and entering the cannabis industry. One of my best friends told me about an opportunity in Illinois and I began looking into it. Upon researching the requirements, I discovered that one requirement was needing to be a state resident for five years. So, I thought my journey was over until I was told the law was unconstitutional. So, a lawyer was hired by Bob Fitzsimmons from Nuera, but he didn’t want anyone to know that he was paying for the lawsuit. The lawsuit sat in limbo in the Seventh Circuit for a couple of years as they debated if it had any bearing. (Finch v. Treto) During this time, Laura Bernal from Nuera sent out messages discussing that I was holding back minorities from getting licenses in Illinois, knowing that the Fitzsimmons were paying for my representation in the suit. Being a bisexual black veteran, the last thing I want to do is prevent other minorities from being a part of the industry. Once I heard about their words, I was offended and felt used as a puppet to allow Nuera and its subsidiaries (Nuera Cannabis and Ieso being a few) to build a monopoly in the cannabis industry in Illinois. Since I don’t have an NDA with Nuera regarding what happened, I am letting the cannabis industry know that Nuera used an African American man to keep other minorities out of the marijuana industry. They also tried to hide money owed to me and my business partners for services rendered to commit fraud. So now we are suing them for breach of contract and to bring to light the fraudulent practices they are willing to pursue to make a dollar. See Exhibit 10 attached hereto (emphasis added). f. In a LinkedIn post in August 2024, J. Phelan also falsely alleged that his phone had been hacked and certain messages between him and nuEra executives had been deleted, claiming: Oh I forgot to say this the other day, but a huge thank you to Apple for explaining to me that someone hacked my phone and tried to delete certain messages and emails. Also huge thank you for returning it all to me on an off-network phone to see and telling us how to get legal copies too! Photo shows that my current phone is missing months of texts and the other shows that I had a lot deleted. In response to a comment on the post, J. Phelan stated: I just spent the last two hours filing reports with the FBI to open a case, Apple wants a federal investigation done. 4902-9680-7799, v. 3 17 See Exhibit 11 attached hereto (emphasis added). J. Phelan then filed a report with the FBI alleging Fitzsimmons II was responsible for hacking his phone and deleting messages. See Exhibit 12 attached hereto. g. In a LinkedIn post dated on or about October 19, 2024, J. Phelan claimed that nuEra and its allies were engaged in efforts to intimidate and silence his criticisms of nuEra, stating: As the situation with nuEra Cannabis escalates, it’s become clear that powerful interests are working behind the scenes to silence me and protect those responsible for fraud, breaches of contract, and discriminatory practices in the cannabis industry- issues I witnessed firsthand through my personal experiences. Despite nuEra’s legal team requesting an evidentiary meeting, they failed to reach out to confirm or hold the meeting, further showing their disregard for accountability. This is more than just a business dispute—this is about transparency and justice in an industry that desperately needs reform. Earlier, I posted about an ARDC ethics question on LinkedIn, calling attention to the conduct of their attorney. Thanks to an ally showing me the proper steps, I have now formally filed the complaint, as their actions warranted an official review. This isn’t just about one case—it’s about ensuring those responsible are held accountable, both legally and professionally. Now, influential figures connected to a political party are reaching out to my network, warning them that I am “dangerous” and claiming that I am hurting their interests. These intimidation tactics only confirm that my campaign is working, and that their influence is slipping. If the truth weren’t a threat, they wouldn’t be working so hard to isolate me and silence my allies. See Exhibit 13 attached hereto (emphasis added). h. In episodes 1-3 of the F’n Around podcast, J. Phelan alleged that Fitzsimmons II used Finch in an attempt to manipulate the social equity cannabis lottery process to exclude minority business from the cannabis industry. In addition, Phelan alleged that nuEra, and specifically Bernal, devised a marketing plan to create a product called the Second Station, utilizing images of the North Star and a railroad, intended to represent the Underground Railroad, the purpose of which was to exploit minorities so that 4902-9680-7799, v. 3 18 “the black people will follow that star to [nuEra’s] bottom line.” J. Phelan also falsely claimed in the podcast episode that after he questioned the “Underground Railroad” marketing concept purportedly devised by Bernal and other nuEra executives, he introduced his own plan to market a brand using the name “Interstate 420” and that nuEra then stole the Interstate 420 brand concept and intellectual property from him, utilizing the brand name for its own benefit. Excerpts from these podcast episodes include the following statements by J. Phelan: So we’re on the way out there, and Jerry and I are kicking ideas back and forth, and on the way out there, we kind of came up with this highway interstate brand. I mean, if you look at the state now, it’s called Interstate 420. That was the brand Jerry and I concept up and put up together, that we decided to pitch in this meeting. That was our brand that we figured out on a three, a couple years ago, 2021, maybe, that we pitched this? 2022, somewhere around there. So we have this concept, and that was our pitch for the meeting. And obviously it won. On the way to Michigan. So in three hours, we just had this concept and our idea, which is now one of the fastest growing brands in the state, that I have no ownership in it or nothing. And because I was a partner, I didn’t think any big thing of it, like I’m gonna get my equity, I’m gonna get my ownership, it’s gonna work out great, right? Obviously, when you say, I don’t exist anymore, and don’t want to honor my contracts, you steal the brand from me and my intellectual property. It’s gonna be added to the lawsuit later. * * * She’s there, she’s with her husband Rob, which is the CEO’s son, that Bob’s son Rob. They built a brand around the underground railroad as the second stop of the underground railroad, with the logo of some train thing, I don’t remember. But it had a star on it, the North Star, that all the minority community would follow that star to their dispensaries and their brand and support their bottom line. * * * You know? I mean, they literally sat there in the meeting, were sitting there talking, and they’re joking about, if you put the North Star on a logo, the black people will follow it to the bottom line. * 4902-9680-7799, v. 3 19 I saw everything. We saw it all. But our pitch beat them, because it took us convincing them that this was racist, that wouldn’t work, but they wouldn’t grasp the concept. * * * See Exhibit 14, Transcript of F’nAround EP 01-03 podcast episodes published Oct. 12, 2024 attached hereto, at pp. 13-17, 25-42 (emphasis added). i. While this case has been pending, J. Phelan launched a new website titled “F’n Around” under the domain www.fnaround.com, which, among other things, claims to expose corruption involving the cannabis industry. On the website, J. Phelan posted a “timeline” (which he continues to update) involving his ongoing disputes and allegations of wrongdoing against Counter-Plaintiffs and others. In this “timeline” he published the following statements about Counter-Plaintiffs: [4] August 25, 2023, Nuera owner Bob Fitzsimmons sends text to construction partner of plaintiffs and friend later witness they bribed saying they are prepping for litigation and infers joseph Phelan needs mental help. [8] [10] [15] [16] [26] [29] [34] [47] 4902-9680-7799, v. 3 October 2023 Robb Fitzsimmons the son of Nuera’s owner sexual[ly] harasses a friend of Joe calling Joe crazy and to stay away from Joe. Bank fraud [by NuEra/Fitzsimmons II] to remove owner access. June 10 2024 First large deposit to witness. July 2024 Man-sing contract to take over assets fraudulently and get 100% of profits and buy out during active litigation for 5 million over monthly payments for years pending approval but take over already started. Second deposit to witness made; October 29, 2024 Call with nuera executive and middle eastern money broker to convince witness to not help me and asked them to help them aka bribing a witness to work for them. They commit perjury as different answers from June answer. Fourth deposit made to witness same day as threat. 20 [55] January 15, 2025 Hush money attempt sent via proxy to get me to walk away for 15 million. [73] [77] March 21, 2025 Meeting is set up for me with huge real estate firm owner in Chicago father of a friend and most of it is discussing how I should be killed and scared and nuEra can kill me any time and I should wear a bullet proof vest and comparing what I know to what happens to Clinton’s friends and I should stop before they kill me acting friendly and coded but making sure I got the message. Meeting recorded. April 1, 2025 I find proof of bribes to a witness aligning with court dates to our old inactive construction company not allowed to operate in Illinois and proof the money being used for mortgage Hoa, paying his wife, himself and lots of drinking and shopping. See updated Exhibit 15 attached hereto (emphasis added). 71. J. Phelan has represented on the F’n Around website and in other forums that he is an investigative journalist, asserting that “we are fully protected under the First Amendment of the United States Constitution and operate within the legal rights afforded to all independent press organizations,” in an effort to portray himself as a legitimate journalist and bolster his credibility. 72. Counter-Defendants have also taken actions to tortiously interfere with Counter Plaintiffs’ existing and prospective business relationships, including, but not limited to: a. b. c. d. e. encouraging other cannabis-related businesses to stop doing business with nuEra; falsely claiming that Better Business Bureau reports which were disputed by nuEra were true; accusing NuMed of intentionally mislabeling cannabis products as containing higher percentages of THCa or higher quantities than were present in the products sold,; falsely reporting to Indeed that nuEra had created a new business page to mislead potential job applicants; encouraging former employees to report alleged improper business practices by nuEra to state or federal regulatory agencies; 4902-9680-7799, v. 3 21 f. contacting media sources and issuing “press releases” containing false accusations regarding Counter-Plaintiffs; g. 73. making false reports to state and federal regulatory agencies accusing nuEra of fraudulent, illegal, and criminal conduct. On September 6, 2023, Counter-Defendants filed this Case No. 2023 L 8973, which remains pending in this Court. The purpose of J. Phelan’s media campaign across various platforms was to improve his position in this case and to extort money from the Counter-Plaintiffs. 74. Attached as Exhibit 16 hereto is the Cease and Desist letter dated October 3, 2024 from counsel for Counter-Plaintiffs to counsel for Counter-Defendants regarding the activities of J. Phelan. Neither Counter-Defendants nor their counsel responded to this letter. 75. At all relevant times, the Counter-Defendants worked in concert to achieve the following objectives: (i) extort money from Counter-Plaintiffs; (ii) ruin the reputations of Counter Plaintiffs, and (iii) destroy the NuMed and nuEra entities. 76. As a result of the actions of Counter-Defendants, Counter-Plaintiffs have sustained actual damages. 77. Counter-Plaintiffs seek actual damages, presumed damages, and punitive damages arising out of Counter-Defendants J. Phelan’s and Finch’s defamatory per se statements impugning Counter-Plaintiffs’ integrity in the performance of their professional and business duties as a multi state operator with cannabis businesses in Illinois, Michigan, and other states. 78. In addition, Counter-Plaintiffs seek actual damages, presumed damages, and punitive damages arising out of Counter-Defendants J. Phelan’s and Finch’s defamatory per se statements accusing Counter-Plaintiffs of engaging in criminal and illegal activities, including tax fraud, bank fraud, sexual harassment, bribery, intimidation of witnesses, perjury, “hacking” J. Phelan’s phone and internet devices, and making death threats. 4902-9680-7799, v. 3 22 79. Counter-Plaintiffs also seek actual damages, presumed damages, and punitive damages due to Counter-Defendants J. Phelan’s and Finch’s defamatory statements which have placed Counter-Plaintiffs and their myriad business operations in a false light which is highly offensive to a reasonable person. COUNT II (Defamation Per Se against Joseph Phelan and Juan Finch) 80. Counter-Plaintiffs restate and reallege paragraphs 1-11, 13-14 and 47 through 79 above as though fully set forth herein as paragraph 80 of this Count II of their Counterclaim. 81. Counter-Defendants J. Phelan and Finch made one or more false statements as set forth above in paragraph 61 about Counter-Plaintiffs, which accused Counter-Plaintiffs of lacking integrity to perform their professional duties, engaging in sexual harassment, bank fraud, tax fraud, witness bribery and intimidation, perjury, making death threats, and other criminal, illegal, and fraudulent conduct prejudicing Counter-Plaintiffs in their profession. 82. The false statements made by Counter-Defendants J. Phelan and Finch were published to third parties without any applicable privilege to do so. 83. The publication of the false statements has proximately and directly damaged Counter-Plaintiffs. WHEREFORE, Counter-Plaintiffs pray for judgment in their favor and against Counter Defendants, Joseph Phelan and Juan Finch, jointly and severally, on Count II of this Counterclaim, awarding them compensatory and presumed damages in excess of One Hundred Thousand Dollars ($100,000.00), together with punitive damages in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), in an amount to be determined by the Court, plus costs of suit and all additional relief deemed just and proper. 4902-9680-7799, v. 3 23 COUNT III (False Light against Joseph Phelan and Juan Finch) 84. Counter-Plaintiffs reallege paragraphs 1-11, 13-14 and 47 through 79 above as though fully set forth herein as paragraph 84 of this Count III of their Counterclaim. 85. As a result of Counter-Defendants J. Phelan’s and Finch’s statements that Counter Plaintiffs were unethical, racist, guilty of sexual harassment, bribery, witness intimidation, bank fraud, making death threats, fraud, and other criminal activities in connection with the performance of their professional duties, as owners and operators of one of the largest cannabis businesses in Illinois, Counter-Plaintiffs were placed in a false light before the public. 86. Being portrayed as individuals and businesses that intentionally engage in bribery, witness intimidation, bank fraud, tax fraud, sexual harassment, making death threats and unethical, racist, criminal, and fraudulent behaviors with respect to their employees, business associates, and their customers, is highly offensive to a reasonable person. 87. Counter-Defendants J. Phelan and Finch acted with actual malice in publishing the false statements, with the intent to damage the personal and professional reputation and good standing of Counter-Plaintiffs and the nuEra Entities. WHEREFORE, Counter-Plaintiffs pray for judgment in their favor and against Counter Defendants, Joseph Phelan and Juan Finch, jointly and severally, on Count III of this Counterclaim, awarding them compensatory and presumed damages in excess of One Hundred Thousand Dollars ($100,000.00), together with punitive damages in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), in an amount to be determined by the Court, plus costs of suit and all additional relief deemed just and proper. 4902-9680-7799, v. 3 24 COUNT IV (Tortious Interference with Prospective Business Relationships against Joseph Phelan and Juan Finch) 88. Counter-Plaintiffs reallege paragraphs 1-11, 13-14 and 47 through 79 above as though fully set forth herein as paragraph 88 of Count IV of their Counterclaim. 89. Counter-Plaintiffs had prospective contractual relationships with certain cannabis companies that they reasonably expected to materialize into continuing or valid business relationships. 90. Counter-Defendants, J. Phelan and Finch, knew of these expectations and intentionally and without justification interfered with nuEra’s expectations by publishing false allegations about Counter-Plaintiffs and requesting that companies, prospective employees, and suppliers boycott nuEra. 91. J. Phelan’s and Finch’s intentional interference prevented Counter-Plaintiffs’ legitimate expectancies from developing into valid business relationships. 92. As a result of J. Phelan’s and Finch’s actions, Counter-Plaintiffs have been damaged in an amount in excess of $100,000.00. WHEREFORE, Counter-Plaintiffs pray for judgment in their favor and against Counter Defendants, Joseph Phelan and Juan Finch, jointly and severally, on Count IV of this Counterclaim, awarding them compensatory damages in excess of One Hundred Thousand Dollars ($100,000.00), together with punitive damages in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), in an amount to be determined by the Court, plus costs of suit and all additional relief deemed just and proper. 4902-9680-7799, v. 3 25 Respectfully submitted, ROBERT V. FITZSIMMONS II, NUMED MANAGERS, INC., ROBERT FITZSIMMONS III, LAURA JARAMILLO BERNAL, IESO, LLC, NUMED EAST PEORIA LLC, NUMED URBANA LLC, NUMED CHICAGO LLC, NUERA DEKALB LLC, NUERA EAST DUBUQUE LLC, AND NUERA CHICAGO SOUTHLAND LLC By: Robert S. Minetz Latimer LeVay Fyock LLC Attorney for Counter-Plaintiffs