Savage Lawsuit Gets … Savage

The Savage vape company is suing its founder and former president, Christopher Wheeler, for creating a new company called New Savage and trying to destroy the original company.

Savage is known for its flavored vape products, hemp, and cannabis-related products.

Wheeler founded Savage in 2015 with Matthews Winters. The lawsuit states that in 2022 Savage has sales of $150 million and employed 250 people. Winters was secretary, treasurer, and CFO until December 2021. Wheeler served as president and CEO until he was recently removed; Winters then took over as CEO.

Wheeler Removed

Savage said it threw Wheeler out of the company after he began pursuing a mushroom product line that the board voted to pause. A majority of the shareholders and directors believed the product line, which involved as psychoactive distillate found in Amanita muscaria mushrooms, was not ready for the public and voted against the expansion until more research could be done.

However, it seems Wheeler decided to continue to develop it, going as far as having it manufactured, packaged, and ready to ship to customers.

The company said it became concerned at Wheeler’s push for the new product line and launched an investigation. According to the lawsuit, the company determined that Wheeler had misappropriated company funds for his own personal use.

“Wheeler used the company account as his personal piggy bank, paying tens of thousands of dollars of personal expenses as if they were corporate expenses, evading both payment and personal tax liability,”  the lawsuit alleged.

On March 9, Wheeler resigned from the company.

New Savage

Savage claims that before Chris resigned, he and his brother Preston created a separate company called New Savage on Feb. 20. The suit also alleges, Wheeler took many key employees with him to the new company, as well as proprietary company information, such as product recipes and formulas.

He is also accused of taking the company’s wholesale customer list.

In addition, Savage accuses New Savage of copying the product packaging designs. The original Savage products are called Extrax with dripping paint motifs; the New Savage products are called Exodus and have a similar dripping graphic image.

The lawsuit claims that the New Savage company employees told wholesale customers that the old company had gone out of business. Original Savage also claims it is losing business due to market confusion created by New Savage.

The lawsuit also names Wheeler’s assistant, Ambyr Freestone, and Mia Jensen, who is accused of taking the client list.

Winters said in a company statement, “Chris is attempting to compete with Savage Enterprises by using our trade secrets, recipes, formulas, and other proprietary information in breach of his written, signed, agreements, and his fiduciary duty as a board member and a major shareholder. Savage Enterprises also filed a request for a Temporary Restraining Order to protect Savage Enterprises’ design, materials, and trade secrets.”

Winters and Wheeler each own 40.5% of the company. Other shareholders include:

• Brittany Hawkins, Winter’s sister, 10%
• Ernest Ciaccio, 4.5%
• Abraham Sahagun, 4.5%.

Ciaccio and Sahaguun became partial owners when Savage acquired Honest PP&D in May 2022. At the time of this acquisition, the suit says Wheeler signed employment contracts that specify Wheeler’s responsibility to protect Savage’s proprietary information.

The lawsuit wants Wheeler to stop using the name New Savage and quit using the company’s product formulations.

“Savage Enterprises regrets that we must sue former colleagues to get them to return our property and prevent them from using our hard-earned trade secrets and proprietary information, but we were given no other choice. While we are operating in a young industry, compliance with written agreements, corporate obligations, and fiduciary duties are paramount if we are to be successful and taken seriously by investors.”