Vertical Harvest, a hydroponic farm located in downtown Westbrook, is facing a lawsuit for allegedly failing to repay fees owed to a broker that facilitated a federal loan of $48.75 million. The lawsuit, which was filed on December 19, 2025, claims that Raiven Fund Management, a Canadian venture capital firm, and Paul Dugsin, the firm’s principal, misled Waterside Commercial Finance into agreeing to defer a payment of 2% of the loan proceeds, amounting to approximately $975,000.
Waterside is seeking full repayment along with damages, attorneys’ fees, and any additional penalties deemed appropriate by the court. Vertical Harvest, which aims to produce 3 million pounds of leafy greens annually, has secured nearly $60 million in financing and is now operational after overcoming construction delays, according to CEO Nona Yehia.
Details of the Allegations
Yehia addressed the lawsuit in an email, stating that the company is focused on business operations and customer service as the legal proceedings unfold. “We are aware of the filing and want to be clear that the claims being asserted are inaccurate and materially misleading,” she wrote. She emphasized that the dispute stems from a complex financing and vendor relationship, rather than any operational failures.
The lawsuit alleges that at the closing of the loan, Vertical Harvest made an initial payment of $75,000 to Waterside. In April 2024, a “subordinated note agreement” was established, which outlined terms for repaying the remaining $900,000. This agreement stipulated that Waterside would only be repaid after senior lenders had received their payments, a condition that Waterside claims was confirmed by Dugsin.
If repayment is not made within eight months, Vertical Harvest would reportedly owe Waterside $1.8 million, which is double the original amount. Furthermore, interest would accrue at an annual rate of 25%. The agreement also indicated that repayment would remain mandatory unless Vertical Harvest could provide written proof that senior lenders objected to the payment plan.
Further Financial Challenges
The lawsuit contends that if Dugsin had not assured Waterside of the senior lenders’ approval, the broker would not have entered into the agreement. Dugsin is named individually in the lawsuit, while Raiven is held vicariously liable due to his position at the firm.
Compounding the issues, the lawsuit alleges that Vertical Harvest failed to make any payments to Waterside after receiving new financing that exceeded $500,000. Reports indicate that the farm received additional capital from Raiven in September 2025, which was not disclosed to Waterside, leading to further breach of agreement claims.
This 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. At that time, Yehia stated that the farm was not yet operating at full capacity.
As the situation develops, Vertical Harvest’s ability to navigate these financial challenges will be closely watched by stakeholders in the agricultural and investment sectors. The outcome of the lawsuit could have significant implications not only for the farm but for its investors and the broader community it serves.