UPDATE: A lawsuit has been filed against Vertical Harvest, a hydroponic farm in downtown Westbrook, over allegations of unpaid fees exceeding $975,000. Waterside Commercial Finance, the broker responsible for securing a $48.75 million federal loan for Vertical Harvest, claims the farm misled them regarding repayment terms.
The lawsuit, lodged on December 19, 2025, accuses Raiven Fund Management and its principal, Paul Dugsin, of deceiving Waterside into deferring payment of 2% of the USDA loan proceeds. Waterside is now seeking full repayment along with damages and legal fees, intensifying the financial pressure on Vertical Harvest.
Vertical Harvest, a four-story facility expected to produce 3 million pounds of leafy greens annually, has faced multiple financial challenges. CEO Nona Yehia stated that the farm, which is now operational after a rocky start, is focused on generating revenue and serving its customers while navigating this legal dispute. In her statement, she emphasized, “We are aware of the filing and want to be clear that the claims being asserted are inaccurate and materially misleading.”
According to the legal documents, Waterside received an initial payment of $75,000 at the closing of the loan. In April 2024, the two parties entered a “subordinated note agreement” that outlined terms for repaying the remaining $900,000. The lawsuit highlights that failure to repay within eight months could escalate the amount owed to $1.8 million, with an annual interest rate of 25% accruing thereafter.
Crucially, the agreement stipulated that Waterside would only receive payment after senior lenders were satisfied, with Dugsin allegedly confirming their approval. However, the lawsuit contends that Vertical Harvest did not disclose a new financing round exceeding $500,000 received from Raiven in September 2025, which should have triggered a payment to Waterside.
This is not the first financial hurdle for Vertical Harvest. Earlier this year, the city of Westbrook filed a lien against the farm for nearly $45,000 in unpaid taxes, as reported by Yehia, who noted that the farm had yet to operate at full capacity.
As this situation unfolds, the implications for Vertical Harvest could be severe. The lawsuit not only poses significant financial risks but could also affect its operations and reputation in the burgeoning hydroponic farming sector.
Watch for updates as legal proceedings continue and both parties prepare for potential court battles. Vertical Harvest’s ability to sustain operations amid these challenges remains a critical concern for its stakeholders and the local community.
