GRAND RAPIDS, MI – A Grand Rapids business owes nearly $153,000 in unpaid loans, a lawsuit alleges.
Northern Initiatives, a community development financial institution based in Marquette, is taking Forty Acres Soul Kitchen and Cognac Bar to court claiming the restaurant’s owners have defaulted on a $260,250 loan, according to a lawsuit filed in the 17th Circuit Court of Kent County.
The lawsuit, filed earlier this month, names the business and owners Darel Ross II and Lewis Williams as defendants. The owners could not be reached for comment about the allegations in the lawsuit.
Northern Initiatives in April 2018 made two loans to Forty Acres, according to the lawsuit. The first totaled $200,000, and the second totaled $50,000. The restaurant group agreed to pay the loans back in monthly installments, with the balance due by April 15, 2025, for the $200,000 loan and Oct. 15, 2025, for the $50,000 loan, according to the lawsuit.
The CDFI made a third loan to Forty Acres in April 2020 amounting to $10,250 with the promise that the restaurant group would pay the balance back before April 15, 2024, court documents state.
The company and its owners, however, did not make timely payments according to the loans’ terms and are in default of all three loans, Northern Initiatives claims. As of Jan. 3, the group owes roughly $118,888 for the $200,000 loan, $30,715 for the $50,000 loan and $3,277 for the $10,250 loan, according to the suit.
In the lawsuit, Northern Initiatives is seeking payment of the debt, plus roughly 13% interest for each loan. Forty Acres also must pay the organization’s attorney fees.
As of publishing, Forty Acres and its owners have not responded to multiple requests for comment.
Northern Initiatives issued a statement on the suit that offered few details.
“Our goal is always to see small business owners succeed,” the statement read. “Because of pending litigation, we are unable to share specifics regarding the lawsuit. However, we, as an organization, are saddened that we have reached the point of needing to take legal action. We hope to continue dialogue with the management at Forty Acres Soul Kitchen to meet the goal of finding a sustainable path forward for the business.”
Ross in a June 2023 interview with MLive said the restaurant’s journey has been “extremely tough, but extremely rewarding.”
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Forty Acres Soul Kitchen is a Black-owned business located at 1059 Wealthy St. SE. The restaurant’s name pays homage to the promise of “40 acres and a mule” the Union made during the Civil War to help former slaves, that never came to fruition.
Northern Initiatives provides loans and business services to Michigan entrepreneurs and small business owners. The CDFI since 1994 has issued 157 loans totaling nearly $10.9 million in West Michigan, according to its website.
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