EDWARDSVILLE - An investment company and its founder are facing a lawsuit over a claim of breach of contract but are also accused of fraud and negligent misrepresentation.
The case filed Nov. 22 in Madison County Circuit Court center on a promised $1 million investment in a medical technology company.
Investment company Native Capital Investment and its principal Wendy K. White Eagle are accused of repeatedly promising but failing to send the first of a series of checks following a subscription agreement with Harbor Medtech.
One of Harbor Medtech's investors and lenders, Arsenal Capital Management, and its principal, Peter Reinecke, filed suit against Native, alleging breach of contract, fraud and negligent misrepresentation. Native Capital Investment did not immediately respond to a request for comment from the Record.
After Arsenal Capital Management paid for Native Capital to carry out due diligence and research, the suit details how the defendant then entered into an agreement to buy $1 million worth of preferred stock in Harbor Medtech, to be paid in installments.
While the first installment was due in March, no money was ever sent despite repeated promises made by White Eagle over several months, including the sending of images of checks.
Harbor Medtech, Arsenal Capital Management and other investors relied on the investment to make business decisions, the suit states.
On the breach of contract count, the plaintiffs are seeking more than $50,000, but want punitive damages for alleged "willful, wanton and reckless disregard" as the defendants promised money but knew it was not available.
The plaintiffs are also seeking punitive damages from the plaintiffs for negligently misrepresenting themselves as accredited investors with substantial knowledge and experience.
Arsenal Capital Management and Reinecke are represented by Kevin P. Green of Goldenberg, Heller & Antognoli of Edwardsville.
Madison County Circuit Court case number 2019-L-1686