Ferrum Capital denied wrongdoing. In court filings, Ferrario and his legal team argued that Versus was already insolvent and mismanaged. They contended that the loan default was legitimate—Versus had failed to provide required financial statements and personal guarantees. Ferrum portrayed itself as a creditor simply exercising its legal contractual rights to protect its investment, not as a predator.
Hightower refused to pay. And here is where the lawsuit gets spicy.
: In 2024, the court placed Ferrum under the control of a receiver , John Patrick Lowe, to identify and recover assets for the victims. ferrum capital lawsuit 2021
The unraveling of represents one of the most significant financial fraud cases to impact retail investors in Texas in recent history . While civil lawsuits and investigative reports began surfacing heavily in late 2023, key corporate actions and highly questioned investment tranches date directly back to 2021. These actions laid the groundwork for a massive legal collapse.
Enter Ferrum Capital. According to the complaint filed in June 2021, Ferrum agreed to provide a massive $35 million PIPE investment. In exchange, Hightower made a critical concession: they agreed to pay Ferrum a if the merger failed to close by a specific drop-dead date. Ferrum Capital denied wrongdoing
(Invoking related search suggestions.)
This lawsuit was eventually settled confidentially in early 2022 (the court filed a stipulation of dismissal in March 2022). But its echoes are still relevant: Ferrum portrayed itself as a creditor simply exercising
The lawsuits and subsequent federal indictments center on three primary individuals and four "Ferrum" entities:
via the SEC or FINRA.
Lubbock, Texas businessmen founded Ferrum Capital in 2017. Operating through a cluster of interconnected entities—including Ferrum Capital LLC, Ferrum II LLC, Ferrum III LLC, and Ferrum IV LLC—the co-founders pitched a highly lucrative, seemingly low-risk alternative investment strategy. The Pitch: Distressed Debt and High Returns