Partners at a modular construction firm powering 7 Brew Drive-Thru Coffee’s rapid national expansion are locked in a legal fight over an alleged embezzlement scheme.
Ron Crume has filed a lawsuit alleging that Lee Loveall diverted more than $2 million in company funds for personal uses including family vacations to Hawaii and a truck purchase for his son. The suit accuses Loveall of concealing the transactions and preventing an accounting of losses by blocking access to Creative Modular Construction’s (CMC) records, IT systems and financial backups.
Loveall’s wife Leanna, a former CMC employee who had access to its financial systems, was also named as a defendant.
A circuit judge in Greene County, Missouri, on Feb. 9 blocked the Lovealls from altering or destroying company records and issued an injunction ordering them to give the plaintiff access to the records.
As of Wednesday, the Lovealls had not filed a response to the lawsuit, which accuses them of fraud, conversion, unjust enrichment, breach of fiduciary duty, and breach of operating agreement.
The suit seeks compensatory damages, disgorgement, restitution, and punitive damages.
Growing Business
Crume of Benton County is a co-founder of Springdale-based 7 Brew. He and his wife Lisa launched the brand in Rogers in 2017.
The chain is now owned by a mix of private investors. Chief Operating Officer Drew Ritger told Arkansas Business in 2023 that Ron Crume was still a shareholder in the company but was no longer involved in its operation.
The Crumes are the owners of Club 37 LLC, which holds a 50% interest in CMC.
Lee Loveall holds the other 50% share.
The construction firm, headquartered in Springfield, Missouri, was organized in 2021 to serve as the exclusive modular building manufacturer for 7 Brew. The company’s prefabricated structures are dropped via crane onto a prepared foundation, allowing 7 Brew to open new locations quickly and inexpensively.
The coffee chain recently surpassed 600 stores and announced two development deals that will accelerate its growth.
To support its own growth, CMC in 2024 broke ground on a new $30 million facility in Springfield.
Ownership Showdown
Crume’s lawsuit accused the Lovealls of diverting CMC funds through multiple channels, including unauthorized company checks and cash withdrawals, and mixing the funds with personal accounts and those of other companies under the Lovealls’ control.
Lee Loveall, as manager of CMC, allegedly received a large company distribution that was approved only on the condition it be reinvested as a capital contribution into a building project, but he instead kept the funds for personal use.
Club 37 has since moved to take operational control of CMC and cut ties with the Lovealls. The company fired Lee Loveall and issued a notice of dissociation severing its financial connections to him, though he has refused to recognize the validity of those actions, the lawsuit said. Leanna Loveall was removed as signatory on all company bank accounts.
In a request for a temporary restraining order, the plaintiff asked the court to declare that Lee Loveall no longer has company management or voting rights. The request also seeks the buyout of Lee Loveall’s membership interest.
Judge Derek A. Ankrom denied that request and set a preliminary hearing for March 3.
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