INDIANAPOLIS (WISH) — A lawsuit claims that the founder of Scotty’s Brewhouse defrauded investors.
A lawsuit claims that Wise lied to two investors about the sale of Scotty’s to private equity group Due North Holdings.
The investors, Mark Bosler and Michael Murray, said Wise told them both that the company had $5 million in debt and would be sold for $20 million. Wise later told them the company was actually sold for $10 million and that the company had $8 million in debt. The lawsuit claims that Wise knew all along that the company wouldn’t sell for the $20 million price he had touted.
The two men said they’ve lost over $1 million that they had invested following the 2008 financial crisis.
Bosler also claims Wise told him that he would “double his money” in a year.
The men also claim Wise tried to get them to sign an “indemnity agreement” which “released Wise of all liability if he were to pay both men $500,000” and “included a provision that Bosler and Murray would pay $100,000 for any disparaging remarks they might make about him to third parties.”
The men did not sign that agreement.
They also say he didn’t disclose a yearly salary that he would receive after selling the company.
The men also claim that Wise sold them securities in Scotty’s Holdings that weren’t federally-covered securities and that the securities were not registered under the Indiana Securities Act.
The men are seeking the return of approximately $1 million, plus interest and attorney’s fees.