when greenwood became the new bank Paul Judge, the fintech co-founder, acquired The Gathering Spot, a social and coworking club for black and Latino clients last year, with the aim of attracting black and Latino clients describes the merger It’s a “black-on-black” deal, saying it’s “two black-owned companies that reinforce each other.”
However, more than a year later, all hope and goodwill evaporated.
The Gathering Spot (TGS) CEO and co-founder Ryan Wilson is suing Judge, Greenwood co-founder Ryan Glover and the fintech company itself, alleging that Greenwood and its founders failed to pay Wilson and former TGS shareholders the proceeds promised in their In the purchase agreement, the fintech company refused to pay bonuses to TGS employees and so on. Wilson alleges that he and his fellow TGS shareholders are owed $5 million in earnings payments and other compensation.
Greenwood, in turn, has denied the allegations and in a countersuit alleges that the TGS founders misrepresented their finances, resulting in unexpected debts of more than $27 million.
Wilson declined to comment. Glover and the judge did not respond to requests for comment.
Additionally, TGS co-founder T’Keel “TK” Petersen is leaving the company to take on the role of TGS chief operating officer, Greenwood reported over the weekend. Shortly after, Greenwood announced that it had hired Mike McCloskey as chief financial officer. TGS later Clarified in an Instagram post Peterson’s departure was unrelated to McCloskey’s hiring.
What went wrong?
From the start, not only did TGS and Greenwood share a remarkably aligned demographic focus, but they also seemed to share the same ethos. Greenwood launched shortly after the murder of George Floyd as a banking platform for the black and Latino community. Founded in 2016, The Gathering Spot is a social platform and co-working hub for underprivileged groups.
Both companies claim to help minorities achieve intergenerational wealth and financial freedom through entrepreneurship and networking. According to a complaint by Wilson, Greenwood’s acquisition of TGS created the largest fintech and community platform for minorities in the United States. So, when Greenwood acquired TGS, It is said $50 million in cash and stock last year felt like luck.
But that dream is now becoming a sad reality.
The first crack in the relationship came at the end of February, when Wilson filed a complaint against Greenwood, alleging the company had breached its contract by “willfully misconducted in breach of the purchase agreement”.
Greenwood filed a countersuit in June, alleging that Wilson, Peterson and TSG shareholders misunderstood the contractual agreement and ignored their “own bad conduct that led to the alleged violations they are now complaining about.”
Wilson filed another complaint in July alleging that Greenwood failed to make a $5 million earnings payment to TGS shareholders after meeting the revenue threshold and refused to pay any bonuses for 2022. Judge and Glover then used the Greenwood funds to pay themselves “excessive bonuses” and other “favorable transfers to themselves,” the complaint alleges.
It also alleges that Greenwood repeatedly missed payment deadlines to TGS shareholders, including Valor Ventures, Cameron J. Newton Enterprise and JAAD Capital, and refused to make payments. Wilson also believed Greenwood’s failure to make payments stemmed from financial problems and expected the company to soon go bankrupt, the indictment said.
Greenwood has raised nearly $90 million in funding and was last valued at $325 million brochure.Before Greenwood, Judge had long career As a tech executive, founder and investor, this track record can be sweet music to investors.
Greenwood’s backers are all major players in venture capital and financial services. They include Bank of America, Citigroup, Fidelity, JPMorgan, Mastercard, Visa, and Wells Fargo. Its financial investors include Black Operator Ventures, Lightspeed and SoftBank’s Opportunities Fund (of which Judge currently serves as chairman), among others.
Meanwhile, The Gathering Spot has more than 12,000 members with locations in Los Angeles and Atlanta. Wilson and Petersen honored for work at TGS present The Phoenix Award, which is the city’s highest honor.
The lawsuit has the dark tech ecosystem worried about the future of the community.
Zane Capital founder Shila Nieves Burney said she was heartbroken when she heard the news of Peterson’s departure. “I’m a big fan of what TK and Ryan built, and The Gathering Spot was my main meeting place when building Zane,” she told TechCrunch+. “I hope that with the takeover, this community doesn’t disappear. We’re already suffering from the loss of traditional knowledge.”
Entrepreneur and TGS member Kaisean Raines said the situation had sparked “a range of emotions” in her and others in the community.
“We were surprised and disappointed mainly because the incident exposed gaps in communication and transparency. It was a stark reminder of how important these aspects are to maintaining trust and cohesion within the community,” she said. “On the other hand, it has also sparked constructive conversations about the need for improvement and the potential for growth. We use this as a learning experience and hope that it will ultimately lead to a stronger and more resilient community.”