Broker Sues Vertical Harvest Over Alleged Unpaid Loan Fees

A lawsuit has been filed against Vertical Harvest, a hydroponic farm located in downtown Westbrook, Maine, for failing to repay a broker involved in securing a significant federal loan. The legal action, initiated on December 19, 2025, alleges that Raiven Fund Management, a Canadian venture capital firm, along with its principal, Paul Dugsin, misled Waterside Commercial Finance into deferring payment on a portion of the proceeds from a $48.75 million loan provided by the United States Department of Agriculture (USDA).

Waterside Commercial Finance is seeking the full amount owed of $975,000, along with attorney fees and other penalties deemed appropriate by the court. The allegations highlight a complex financial relationship that has raised questions about the operational integrity of Vertical Harvest, which aims to produce 3 million pounds of leafy greens annually.

Vertical Harvest has received nearly $60 million in financing and, after experiencing construction delays, is now operational, according to CEO Nona Yehia. In an email statement, Yehia emphasized that the company is focused on its business operations and customer service as the lawsuit unfolds. “We are aware of the filing and want to be clear that the claims being asserted are inaccurate and materially misleading,” she stated. “This is a commercial dispute arising from a complex financing and vendor relationship, not an operational failure or cessation of business.”

The lawsuit details that, during the loan’s closing, Vertical Harvest initially paid Waterside $75,000. In April 2024, the two parties entered into a “subordinated note agreement,” which outlined the repayment terms for the remaining $900,000. This agreement stipulated that Waterside would receive payment only after the obligations to senior lenders were met. If repayment was not made within eight months, the amount owed would escalate to $1.8 million, with interest accruing at an annual rate of 25%.

The lawsuit asserts that both Vertical Harvest and Dugsin confirmed the approval of this repayment plan by senior lenders. This confirmation was crucial for Waterside’s agreement to defer payment. Dugsin, named as chair of the board of Vertical Harvest, is being sued individually, with Raiven Fund Management facing vicarious liability due to his role.

Compounding these financial difficulties, the lawsuit claims that Vertical Harvest did not make payments to Waterside after receiving new financing exceeding $500,000. It is alleged that in September 2025, Vertical Harvest secured additional capital from Raiven but failed to disclose this to Waterside, further complicating the repayment situation.

This lawsuit is not the first financial challenge for Vertical Harvest. In the fall of 2025, the city of Westbrook filed a lien against the farm for nearly $45,000 in unpaid taxes. During that period, Yehia indicated that the farm was not operating at full capacity.

The outcome of this lawsuit could significantly impact Vertical Harvest’s financial stability as it continues to navigate the complexities of operating a large-scale hydroponic farm. As the case progresses, all parties involved will be keenly observing how the court addresses the claims and counterclaims surrounding this contentious financial dispute.