Former investors of food delivery startup Freshly are suing Nestlé USA, which acquired the company in 2020 for up to $1.5 billion.
The shareholders allege that Nestlé failed to make earnout payments to Freshly shareholders pursuant to the merger agreement, according to Law.com. Per that agreement, as reported by TechCrunch at the time of the acquisition, Nestlé had agreed to pay $950 million plus potential earnouts of up to $550 million based on future growth.
Insight Partners, White Star, Highland Capital Partners, Slow Ventures and others were among those participating in the lawsuit as part of a group called Shareholder Representative Services LLC.
Bloomberg Law reported that the lawsuit, which is not publicly available, alleges that Nestlé pressured Freshly founder Michael Wystrach “to step down after the transaction – rather than admit he was being forced out – to avoid triggering nine-figure payments to the former shareholders.”
In late December, Freshly announced that it was halting its direct-to-consu …
