SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF Suffolk
Robert Wilson,
Plaintiff,
v.
Unique Logistics International, Inc.,
Defendant.
Index No.: 631623/2024
Replay to Dependents Reply
Legal Statement Regarding UNQL Notes and Criminal Usury Violations
Following its merger with Innocap, UNQL signed two notes totaling under $2.5 million with interest rates of 1137% and 11,101%,. When fully executed, these notes would have resulted in the issuance of over a billion shares of stock. This is not only a civil matter for damages but also a criminal matter, as the total interest exceeds the 25% limit established by New York law.
In Adar Bays, LLC v. GeneSYS ID, Inc., 2021 WL 4777289 (N.Y. Oct. 14, 2021), the New York Court of Appeals addressed certified questions from the United States Court of Appeals for the Second Circuit regarding New York’s usury laws. One key question was whether a stock conversion option allowing a lender to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest under N.Y. Penal Law § 190.40, the criminal usury statute. The court’s answer was an unequivocal yes.
Before this ruling, the law was less clear. Some lower New York courts and federal district courts previously held that a discounted conversion option did not violate usury laws, often reasoning that the conversion option's value was speculative or that converted stock represented an investment rather than a loan. However, the New York Court of Appeals clarified that New York law requires the value of a conversion option — like all other consideration in a loan — to be included in determining the loan’s effective interest rate, provided that value can be reasonably determined at the time of the contract.
In Adar Bays, the court examined a $35,000 convertible note with an 8% stated interest rate. The lender could convert the note into company stock at 65% of the lowest trading price over the prior 20 days, starting 180 days after issuance. When the borrower refused to honor the conversion option and was sued, it successfully defended itself by proving that the effective interest rate exceeded the 25% usury limit. The court ruled that if the combined value of the conversion option and stated interest rate exceeds 25%, the loan is void, and the lender forfeits all principal and interest — a severe but deliberate consequence under New York law.
On October 8, 2020, UNQL signed a note agreement with Trillium Partners, LP. As of that date, the note’s structure effectively resulted in a staggering 1137% return — equating to $0.0076 per share on 1,496,311,785 shares, or $0.0012 per share.
On November 12, 2020, UNQL signed another note with Unique Logistics Holdings Limited for $5 million. This agreement was structured to return $555,070,931.25 by converting each $25,000 owed into 21.25% of the outstanding common stock. This equated to 7,313,187,500 shares on 172,075,000 outstanding shares — more than 6.5 billion shares beyond the authorized limit — resulting in a return of 11,101%, far exceeding the legal 25% threshold.
Under New York law, these notes are automatically void. Those involved in creating and executing these agreements must be held accountable for the resulting damages to shareholders. Since this information was filed with the SEC, any denial by the defendants constitutes fraud. If they plead no contest, they are still admitting to fraudulent conduct.
I respectfully request that the court enforce N.Y. Penal Law § 190.40 and render a judgment that not only compensates the plaintiffs but also returns the company to non-insider shareholders after voiding the unlawful notes.
Statement of Accuracy
I declare under penalty of perjury under the laws of the State of New York that the foregoing is true and correct to the best of my knowledge.
________________________________________
Robert Wilson
February 21, 2025
Sworn to before me this
21st day of February, 2025
________________________________________
Notary Public
State of New York
My Commission Expires: ______________
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