The founders of networking and co-working club The Gathering Spot are suing Greenwood, which bought it in 2022, claiming the neobank violated their purchase agreement.
T’Keel “TK” Petersen and Ryan Wilson, who co-founded the club for Black professionals in 2016, claim the neobank owes them and other TGS shareholders approximately $5 million in earn-out payments, according to The Atlanta Journal-Constitution.
In a lawsuit filed in February, the founders claim Greenwood engaged in intentional misconduct by withholding the payments, which were tied to TGS reaching a $15 million revenue target.
Greenwood, which denies the allegations, responded with a countersuit in June, claiming Wilson and Petersen made “false and misleading statements” affecting TGS’s valuation at the time of the 2022 deal, the Journal-Constitution reported.
In the suit, Greenwood claims TGS’s misrepresentation led to unforeseen obligations, leaving Greenwood with more than $27 million in unexpected debt.
In a statement to the publication, Greenwood co-founder Ryan Glover said TGS is not profitable and that its Los Angeles location lost more than $2 million last year.
Greenwood has already paid more than $40 million in cash, stock and assumed liabilities, the Bounce TV founder added.
Greenwood did not immediately respond to Banking Dive’s request for comment.
Meanwhile, the neobank’s announcement last week that Petersen, the company’s chief operating officer, would be leaving the company at the end of the month, has sparked criticism that the fintech is straying from its mission.
Another announcement indicated Greenwood had hired Mike McCloskey as its chief financial officer.
In an Instagram post last week, former TMZ personality Van Lathan, who identified himself as a founding member of TGS’s Los Angeles location, highlighted that Petersen is Black and McCloskey is White.
“Firing a founder and adding a white dude to the C-suite is at cross purposes with everything I joined for,” he wrote, according to the Journal-Constitution.
TGS, however, sought to clarify the two announcements in an Instagram post.
“Mike joining Greenwood and TK departing The Gathering Spot are unaffiliated and is not a matter of replacement,” TGS said.
The fallout with TGS’s founders comes as Greenwood has made a series of acquisitions in the past several years that have expanded the platform’s offerings beyond financial services to include entertainment and career development geared toward Black and Brown communities.
Greenweed’s purchase of TGS, combined with its acquisitions of music festival A3C and professional networking platform Valence, created “the largest combined fintech and community platform for Blacks and minorities, serving a community of over a million people,” Glover told Banking Dive last year.
Greenwood also acquired fellow affinity neobank Kinly for an undisclosed amount in May.
