Allegations of fraud and financial misrepresentation provide common points of contention in a small-business dispute in Washington County Circuit Court.
Lori Rae and her Fork & Crust LLC are facing claims of more than $287,000 associated with the business of pie baking at three locations in Fayetteville, Rogers and Bentonville.
In addition to alleged loan defaults, Rae is facing allegations of fraud for financial misrepresentation regarding the fiscal health of Fork & Crust.
Those allegations were leveled by TWG Resources LLC, led by Alex Schwyhart; and James Street Capital LLC, led by Schwyhart’s mother, Virginia Price, and her husband, Shawn.
According to the complaint, TWG is owed more than $184,000 on loans, and James Street is owed more than $53,000 on loans plus $50,000 invested for a 50% stake in Fork & Crust.
The 2019 loans and investment are associated with Rae’s “inadequately capitalized expansion into Fayetteville,” according to the lawsuit.
In her response, Rae has denied the allegations of fraud and financial misrepresentation in connection with the loans and James Street investment.
The Harrison housewife turned baking entrepreneur alleges that Schwyhart and James Street breached their fiduciary duties and committed fraud in coercing her to sign the TWG loan.
Rae also alleges that Schwyhart and/or his wife, Song, improperly diverted $37,000 from Fork & Crust’s bank account, thus committing theft, embezzlement and/or misappropriation of funds.
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