MyPillow and its CEO are expressing borrower's remorse, suing to have a $600,000 loan they took out last month thrown out. Saying that the terms calling for payments of more than $16,000 per day and interest rates topping 320%, the suit filed last week in Minnesota calls the agreement "usurious, unconscionable, and thus unenforceable," the Minnesota Star Tribune reports. The merchant cash advance, which works much as a payday loan does for individuals, "is essentially loan sharking," the filing by the company and founder Mike Lindell says.
As would generally be true of customers who turn to loan sharks for help, MyPillow and Lindell needed a lot of money quickly. The filing says they're strapped for cash, which Lindell has said is because large retailers have left in response to his crusade to convince the nation Donald Trump was the victim of election fraud in 2020. MyPillow and its boss face three federal libel lawsuits that could cost them more than $1 billion in judgments and millions in attorneys fees. A shipping company sued last month for unpaid bills. Lindell is fighting a $5 million arbitration award over a contest he ran related to his election claims.
The loan lawsuit names financial companies based in New York and is based on that state's usury laws. Lifetime Funding, CapSpot Financial, and FunderZ use "improper tactics and devices to ensure that they will be repaid at grossly inflated rates by hook or by crook," the filing says. Lindell argues that he first agreed to the merchant cash advance to get to a real estate loan from Lifetime, a deal that wasn't honored. The merchant cash advance would have cost $840,000 to repay, per the Star Tribune. The initial deal was designed to provoke default and provide a bonanza for the lenders, the suit argues. (More MyPillow stories.)
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