The authorized battle between distressed hashish operator Parallel and its landlord, Progressive Industrial Properties Inc. (NYSE: IIPR), has taken a brand new flip as a Pennsylvania state court docket ordered the dissolution of Parallel’s subsidiary, Goodblend Pennsylvania LLC, over its failure to pay $5.8 million in lease and penalties.
Decide Christine Ward of the Allegheny County Court docket of Widespread Pleas directed Surterra Holdings, the bulk proprietor of Goodblend and one other Parallel-controlled entity, and Medical Bloom Inc., the minority proprietor, to plot a plan for Goodblend’s dissolution and the disposal of its medical marijuana.
The directive was a part of an order signed on Aug. 21 and disclosed publicly on Aug. 24, in accordance with Regulation 360.
“All belongings of Goodblend Pennsylvania LLC, if any, shall be distributed among the many collectors and members,” the decide wrote.
Surterra, a subsidiary of Atlanta-based hashish operator Parallel and the proprietor of 75% of Goodblend, had filed for the dissolution in July, citing the corporate’s incapability to proceed operations. Medical Bloom, which owns the remaining 25%, opposed the request, in accordance with Surterra’s criticism.
The property proprietor, IIP-PA 8 LLC, had filed a separate lawsuit in February looking for to evict Goodblend because of the accumulating unpaid lease, which reached $5.8 million when Surterra filed for dissolution.
Regardless of Goodblend ceasing funds to IIP in October 2022, citing monetary difficulties, it continued to make use of the property. This prompted IIP to file a lawsuit in December to get Goodblend to pay the $5.8 million it owes in lease and penalties for not sticking to its lease on the big, 342,000-square-foot facility in Pittsburgh.
Goodblend had argued that it couldn’t merely shut and relinquish the keys on account of strict state rules on the possession and administration of vegetation, merchandise, and waste. Nonetheless, Decide Ward rejected Goodblend’s objection to IIP’s criticism. A listening to for the owner’s movement to set a trial date was scheduled for September 6.
Though Goodblend knowledgeable Decide Ward in June about its reorganization plan, it later introduced plans to close down its Pennsylvania operations and vacate the Pittsburgh facility, which had a 20-year rental settlement value $68 million. Along with the processing plant, the corporate offloaded its two dispensaries and 76 employees.
Pennsylvania regulation requires Goodblend to offer a 60-day discover of closure, plans for marijuana and extract disposal, and the return of the corporate’s license to the state, Surterra stated in its lawsuit. The corporate claimed that the dissolution order would facilitate this course of.
“Goodblend is bancrupt and doesn’t have the funds required to make its lease funds, different collectors or to proceed its operations,” the criticism stated.
Simply over a 12 months in the past, Parallel and IIP celebrated the acquisition of the Pittsburgh facility, a seemingly significant achievement on the time. Parallel’s subsidiary purchased the property for $22 million, bought it to IIP for $41 million the following day, after which Goodblend rented it for 20 years.
Nonetheless, IIP’s worth suffered when Parallel determined to not go public in a deal valued at $1.8 billion. Since then, each firms have confronted a collection of lawsuits. Buyers sued IIP, claiming the owner did not correctly vet its key tenants, with Parallel and Kings Backyard being a few of its greatest busts.
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