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MyPillow and Mike Lindell claim in a lawsuit that they were deceived by a corporate lender.
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The lawsuit says MyPillow, with little money, borrowed $1.6 million at an “usurious” interest rate.
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Lindell has said he is broke. Records show at least three MyPillow loans have ended up in court.
MyPillow owner Mike Lindell said his company was duped into lending $1.6 million at an annual interest rate of 409%, the latest sign of financial distress for the far-right pillow seller.
Lindell, MyPillow and 18 other corporate entities allege that Cobalt Funding Solutions and another company involved in the loan, Streamline Advance, engaged in racketeering by providing a high-interest advance to merchants – essentially a payday loan for businesses.
Cobalt, Streamline and two men named as defendants “took advantage” of MyPillow, “a cash-strapped company that needed money quickly,” the lawsuit said. The lawsuit alleges that the September agreement to lend nearly $1.6 million was stacked against MyPillow and risked ruining the company.
The lawsuit was first reported by Law.com on December 10.
It's at least the third case filed in recent months involving MyPillow and merchant cash advances. In October, a company called Lifetime Funding said Lindell and his companies defaulted on a $600,000 advance barely a month after borrowing it. About a week later, another company, Shine Capital Group, filed a lawsuit claiming they were at fault on a $2 million deal signed in July.
Both cases are pending in New York. MyPillow has sought dismissal of the Lifetime case, saying the interest on the deal was so high that it violated state law.
MyPillow and Lindell have been struggling for years. They borrowed $10 million in 2022 and were dumped by lawyers after they couldn't pay their legal bills. Earlier this year, Lindell told NBC News he had no money and needed to get to his house and his truck.
The use of merchant cash advances, typically used by struggling companies with no other options, is a sign that the situation has worsened.
Lindell has also been sued several times in connection with his political claims. He has maintained for years that the 2020 election was stolen from Donald Trump, and owes more than $5 million to a man who won his “Prove Mike Wrong” contest by showing his supposed proof that the election was stolen didn't actually prove anything. .
Lindell, Streamline and Cobalt did not immediately respond to requests for comment.
Read the original article on Business Insider
