BREAKING: Vertical Harvest, a hydroponic farm in downtown Westbrook, is facing a lawsuit for failing to repay nearly $975,000 in fees owed to Waterside Commercial Finance. The lawsuit, filed on December 19, 2025, alleges that the farm misled the broker regarding the terms of a significant $48.75 million federal loan it secured for start-up costs.
Waterside claims that Raiven Fund Management and its principal, Paul Dugsin, who also chairs the board of Vertical Harvest, coerced the broker into deferring payment on 2% of the loan proceeds. This financial dispute is escalating, with Waterside seeking full damages, attorney fees, and additional penalties from the court.
Vertical Harvest, which projects an annual production of 3 million pounds of leafy greens, has received nearly $60 million in financing. CEO Nona Yehia stated that the farm is operational after overcoming construction delays, emphasizing that the lawsuit does not reflect an operational failure. “We are aware of the filing and want to be clear that the claims being asserted are inaccurate and materially misleading,” Yehia insisted in an email.
According to the lawsuit, Vertical Harvest initially paid Waterside $75,000 at the loan’s closing. A subsequent “subordinated note agreement” in April 2024 outlined repayment terms for the remaining $900,000. This agreement stipulated that if the loan was not repaid within eight months, the debt could balloon to $1.8 million with an annual interest rate of 25%.
The suit underscores the complexity of Vertical Harvest’s financing strategy, as Waterside states it would not have agreed to the repayment plan without confirmation from senior lenders. Dugsin reportedly confirmed this approval, making him a target for the lawsuit alongside Raiven due to his role in the situation.
Adding to the farm’s financial woes, the lawsuit indicates that Vertical Harvest failed to make payments after receiving new financing exceeding $500,000 from Raiven in September 2025, which was not disclosed to Waterside.
This isn’t the first time Vertical Harvest has encountered financial troubles; Westbrook city officials filed a lien against the farm in fall 2025 for nearly $45,000 in unpaid taxes. At that time, Yehia admitted the operation was not yet functioning at full capacity.
As this lawsuit unfolds, Vertical Harvest’s future remains uncertain. The case highlights the critical need for transparency and accountability within the emerging agricultural financing sector.
Stay tuned for updates as this story develops.
