MyPillow CEO Mike Lindell Files Lawsuit Against Another MCA Lender To Avoid Paying $1.5 Million Payday Loan
MyPillow CEO Mike Lindell is at it again. The desperate pillow pitchman is suing another Merchant Cash Advance Lender for fraud and usury.
In September, Lindell signed a high interest MCA loan for $600,000. Several weeks later, he signed a second MCA loan for over $1.5 million.
The first 34-page lawsuit states the plaintiffs claim the agreement was “usurious, unconscionable and thus unenforceable.”
Lindell’s lawyers stylized the suit as a racketeering (RICO) complaint. However, the lawsuit accuses various lenders of issuing a loan under the guise of a contract. The agreement like all MCA loans states the lender agrees to purchase future receivables at a discount. In this case, MyPillow agreed to repay the face value of its receipts through daily payments.
The lawsuit alleges the lender wrote the loan terms in a way to skirt New York State law.
The plaintiffs say the effective interest rate on the “loan” equates to 368%. When the origination fee of $36,000 is factored into the loan, the interest rate on the loan increases to 441%.
Lindell says he and his companies bore the risk of non-payment of any receivables. They also remained on the hook for the entire amount at issue.
In addition, the lawsuit alleges Lindell and his companies always remained liable for the debt.
Lindell claims the lender never made a bona fide purchase of My Pillow’s receivables under the MCA Agreement. Thus, the MCA agreement is a usurious loan.
MyPillow CEO Mike Lindell Signs 2nd MCA Loan
Now Lindell is now pulling the same tactic a second time to weasel out of paying the loan. Again, he is putting another lender on notice. He claims the terms of the recent loan are “usurious, unconscionable, and thus unenforceable.”
The flailing businessman sued several defendants. He suing over the over a triple-digit interest rate on a $1.559 million loan he took out in September.
The December 2nd lawsuit alleges the daily payments on the balance are in excess of $45,000 per day. The total amount of the loan to be repaid is over $2.261 million.
The 34-page lawsuit filed in Carver county District Court is almost an exact replica of the October lawsuit. Lindell’s lawyers make nearly identical allegations. Both lawsuits accuse lending companies of issuing loans with “exorbitant interest rates.”
Lindell’s lawyers stylized the lawsuits as racketeering (RICO) complaints. In addition to criticizing the business model and MCA companies. Lindell’s lawyers describe them as “predatory” lending outfits that aim to hide within the gray areas of the law.
In this instance, Lindell and MyPillow are suing NYC based Cobalt Funding Solutions.
Lawyers argue that the agreement was executed to skirt New York State’s statutory maximum interest rate.
The plaintiffs say the effective interest rate on the “loan” equates to 409.1%. They argue the interest is higher with the $124,760 origination fee factored into the loan.
Lindell alleges the loan amounts to a conspiracy in violation of federal law. More specifically the federal RICO statute.
Deadbeat MyPillow CEO Mike Lindell Tries To Skirt Out Of Paying His Debts
The MyPillow pitchman’s lawyers argue that two predicate acts required exist to sustain a RICO allegation. The lawsuit alleges the two predicates include two are that the defendants issued the usurious loan and committed wire fraud.
Lindell aims to use the lawsuit to obtain a court order declaring his agreement with the lenders unlawful and usurious under New York law. Thus, void the loan under federal RICO law. Lindell is also seeking tripled damages for various claims. The lawsuit also requests interest and attorneys fees.
Legal experts say there are a number of issues with Lindell’s lawsuits. Mainly, he suing a New York company in Minnesota trying to argue New York law that doesn’t apply to Minnesota. He is also attempting to argue federal law in a Minnesota court.
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