Every day Espresso Information photograph.

A Florida agricultural lender has sued the operator of a Michigan retirement fund over a failed funding in a big Kona espresso enterprise, alleging the fund and its companions misled the lender in regards to the mission’s situation and prospects.

Filed in Polk County Circuit Court docket on Dec. 1, the criticism by Lakeland, Florida-based AgAmerica Lending LLC targets the Municipal Workers’ Retirement System of Michigan (MERS) and different defendants related to the Kona Hills Espresso mission on Hawaii Island.

The swimsuit alleges the defendants hid pre-existing environmental, authorized and building points whereas acquiring two AgAmerica loans totaling $40 million. The second mortgage was based mostly on “optimistic updates” from the mission companions, based on the swimsuit. 

“Nevertheless, in January 2025, AgAmerica was stunned to study that there have been critical issues with the harvest and that tens of hundreds of thousands of {dollars} of further capital could be required to make the Kona Hills mission profitable,” the swimsuit states. 

In line with the lawsuit, the mission’s asset-management firm then ceased monetary help, the loans went into default and the property was foreclosed.

In a press release to Every day Espresso Information, MERS CEO Kerrie Vanden Bosch described the lawsuit’s formal complaints as “baseless and with out benefit.” 

MERS is a nonprofit that administers retirement plans for presidency staff on behalf of roughly 1,000 municipalities all through the state. The group was a principal investor within the Kona Hills mission.

“MERS invested lower than 0.5% of the overall portfolio in Kona Hills as a part of our non-public market allocation,” Vanden Bosch mentioned. “Whereas this particular funding skilled a loss, it was greater than offset by sturdy positive factors in different non-public market investments.”

Earlier public mission descriptions of Kona Hills have described it as Kona’s largest espresso farm, backed by institutional traders and led by a bunch of skilled Kona espresso producers. The farm was established in 2016, combining the Hokukano Ranch and Decrease Kealakekua Heritage Reserve properties with roughly 1,900 acres of agricultural land. 

In line with the lawsuit, MERS held a 99.5% stake in Kona Capital Companions LLC, which in flip owned 97% of Kona Hills LLC. The Kona Hills web site and internet retailer stay on-line. DCN has tried to achieve Kona Hills immediately for remark.

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