Put water bottler in receivership, investors ask

A Florida investment group contends that Mountain Pure and its criminally indicted chief owe it almost $500,000 and has petitioned a Pulaski County Circuit Court judge to put the Little Rock-based water bottler into receivership.

ADVERTISEMENT

More headlines

Appointing a receiver to run Mountain Pure, which has plants in Mississippi and Texas, and its affiliates is “necessary and proper” to make sure the water bottler continues to operate in the face of its legal problems while protecting the investor group’s interest, according to the Feb. 7 lawsuit before Judge Chris Piazza.

Those legal problems are the wire-fraud indictment against John Stacks and a December lawsuit against the company and its affiliates by a cardboard packaging manufacturer from Georgia that claims it’s owed $224,661, according to the petition filed by North Bay Investors LTD.

Since the North Bay suit was filed, a Canadian plastics manufacturer, Selenis Canada Inc., has sued Mountain Pure, claiming it’s owed $362,471 for bottle-making materials the company took possession of in 2012 but didn’t pay for.

North Bay contends that Mountain Pure, Stacks and his son Ryan Stacks duped it out of $493,860 in materials and cash in what was supposed to be a partnership to form a new Mountain Pure company. The father and son misrepresented their ownership of bottling equipment that was to be used to secure the North Bay investment, according to the lawsuit.

Tim Dudley, an attorney for the Stackses, said his clients were aware of the lawsuit, but declined further comment.

North Bay and John Stacks contracted last year to form the new company out of the old, with the investors to put up $1.5 million and own 65percent of the new bottler, according to the suit, filed by attorney Benjamin Brenner of the Mitchell, Williams, Selig, Gates and Woodyard law firm.

The remaining 35 percent of the company would be owned by John Stacks and his sons, Ryan and Court Stacks, who would put up company stock and $200,000, according to the suit.

The contract required John and Ryan Stacks to give the investors group a security interest in Mountain Pure bottle-making machinery the Stackses claimed to own through a company called JFG Holdings LLC. Court Stacks, while not a defendant in the lawsuit, is also a co-owner of JFG, according to the suit.

But JFG Holdings does not have the ownership interest in the equipment it claimed to have because the machinery was already being used as collateral to help secure “millions of dollars” in Mountain Pure debt to Metropolitan National Bank, the lawsuit states.

John Stacks misrepresented ownership of the machinery, and Ryan Stacks, an attorney, knew about it and assisted in that misrepresentation, according to the lawsuit, which accuses the Stackses of securities fraud.

John Stacks was indicted in December on wire fraud, false statement, false claim and money laundering charges over accusations that he fraudulently obtained a Small Business Administration disaster loan by claiming company property was destroyed in a May 2008 tornado at his Damascus home.

According to the 11-count indictment, Stacks wrongfully collected $526,100 from a loan application he made for $703,300. He got the money by misrepresentation, including deceiving the Small Business Administration about company revenue and pending contracts, according to the eight page indictment.

Arkansas, Pages 9 on 02/18/2014

Upcoming Events