On The Daily: Another U-M alum in money trouble
Avomeen Holdings LLC, the chemical testing business is suing founder Shri Thanedar in federal court for making “fraudulent and misleading” claims regarding his company's revenues to inflate the value of its sale. Thanedar, a University of Michigan alum and Democratic gubernational candidate, sold his controlling stake earlier this month, seven years after he founded the company, according to a report by the The Detroit News.
The complaint alleges Thanedar overstated the company's monthly revenue, directed employees to reduce large fluctuations in the month-to-month figures and lied about the methods his company used to record revenue.
“However, purchaser has discovered … that in the critical months leading up to close, Thanedar made fraudulent and misleading representations to purchaser regarding Avomeen's financial practices and the nature and amount of Avomeen's monthly revenues and earnings. In essence, Thanedar falsely portrayed Avomeen as an entity with consistent, growing month-to-month revenue during the critical period leading up to Purchaser's investment transaction,” the lawsuit reads.
Thanedar denied the lawsuit’s allegations in a text to a reporter from The Detroit News but declined to make further comment.
“I patently deny every claim contained in this document and intend to fight it. Because this is a pending legal matter, I am prohibited from saying more at this time,” Thanedar wrote in a statement.
Thanedar received approximately $20 million from the sale of his majority interest in the company to the Chicago-based equity firm High Street Capital, retaining a minority interest through his company Chemreal.
Thanedar's knack for business has figured prominently in his campaign rhetoric. In 2016, he made headlines for giving $1.5 million in bonuses to his employees, and was named Ernst and Young's Entrepreneur of the Year.