More Legal Battles Pile Up for Mountain Pure's John Stacks

by Arkansas Business Staff  on Monday, Feb. 17, 2014 12:00 am  

John Stacks

Mountain Pure LLC of Little Rock can’t seem to catch a break these days.

In the first of two lawsuits filed against the water bottling company this month, North Bay Investors LTD of Miami Beach, Fla., sued Mountain Pure and its owner, John B. Stacks — who is facing federal felony charges in an unrelated matter — over a deal that collapsed late last year.

North Bay said it was supposed to invest $1.5 million with Stacks in two phases to create a new company that would basically be Mountain Pure.

Stacks was supposed to contribute his Mountain Pure stock to the new company, according to the letter of understanding he signed, which is filed as part of the lawsuit. (In some places in the document, the resulting company was called Mountain Pure; elsewhere it was referred to as NewCo.)

North Bay would end up owning 65 percent of the new company and Stacks would have a 24.9 percent interest.

North Bay said it supplied nearly $500,000 in raw materials and cash to Stacks as part of the first phase of its investment. But when Stacks didn’t hand over documents that North Bay said it needed to complete its due diligence, North Bay called the deal off in December, the lawsuit said.

North Bay said it hasn’t received any of its investment back, and that’s what the lawsuit seeks. Among the allegations of wrongdoing are breach of contract and securities fraud. North Bay also wants a receiver appointed to protect its assets that are at Mountain Pure.

North Bay has “pretty grave concerns given the totality of the circumstances about Mr. Stacks and the Mountain Pure companies that something is going to have to be done very quickly to preserve whatever is remaining of the assets for them and other creditors,” North Bay’s attorney, Ben Brenner of Little Rock, said.

Stacks told us last week that to his knowledge “Mountain Pure received no cash.

"The lawsuit, to me, appears to be an attempt by Federico [Intriago] to disguise these false and untrue claims as an investor in Mountain Pure," he said.

Intriago was Mountain Pure's CEO for several months in 2013.

He said Intriago was an investor in Mountain Pure.

 

 

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