Company Sues Mike Lindell Over $1.5 Million Unpaid Loan
MyPillow founder Mike Lindell is once again facing a hefty lawsuit, this time from a merchant cash advance firm accusing him of dodging nearly $1.5 million in debt.
The plaintiff, Cobalt Funding Solutions, operates out of New York City and specializes in providing “alternative capital” to businesses by advancing loans against their future sales.
In return, they take a portion of the company’s revenues until the loan is repaid—along with a significant premium.
Lindell, however, has been openly critical of the industry, calling it a “sham.” Earlier this month, he launched his own legal attack on Cobalt, alleging the firm’s staggering 409% annual interest rate was “illegal,” “usurious,” and akin to loan sharking.
Cobalt has now fired back, filing a civil complaint last Friday in state court. According to the filing, despite halting payments, the 63-year-old Lindell has “continued to generate and collect millions of dollars in revenue” from the sale of products like pillows and bedding accessories as recently as October 18, 2024.
When reached by phone on Monday, Lindell told The Independent he wasn’t aware that Cobalt had countersued and hadn’t yet seen any of the court documents.
He vaguely suggested that Cobalt had faced issues in the past regarding its business practices, saying, “They’ve gotten in trouble before, and there’s been a lot of stuff going around about that,” but admitted, “I don’t know what it all involves.”
Regarding Cobalt’s lawsuit against him and MyPillow, Lindell said, “I’m not trying to get ahead of this. The lawyers are handling it. Right now, my priority isn’t the lawsuit—it’s running my companies and working to eliminate electronic voting machines. That’s where my focus is.”
In an email on Monday, Christopher Murray, the attorney representing Cobalt in court, declined to comment on the case, citing firm policy.
Merchant cash advances, also called “factoring” arrangements, are not subject to usury laws.
The ugly dispute between Lindell and Cobalt dates back to September 16, when Cobalt paid Lindell about $1.5 million for $2.2 million in expected MyPillow receipts, according to the complaint.
From that point forward, Cobalt began withdrawing $45,000 from MyPillow’s bank account each business day, representing approximately 7.57% of its daily earnings, according to a spreadsheet included with the complaint.
Records show Lindell consistently made payments through mid-October, totaling $814,064.76. However, the complaint alleges that Lindell abruptly stopped Cobalt’s access to the account, blocking further withdrawals of the remaining $1,447,226 owed under the agreement, along with $200 in bank fees for blocked payments.
Since then, Lindell, who personally guaranteed the loan and is legally responsible for it, has allegedly refused to resume the payments, the complaint states.
After launching a personal crusade to “prove” that the 2020 presidential election was stolen from Donald Trump, Mike Lindell faced a cascade of financial and legal troubles. Big box retailers dropped his MyPillow products, leaving the company cash-strapped and forcing it out of its Minnesota warehouse due to unpaid rent.
Lindell’s attorneys quit over millions in unpaid legal fees, and a judge ordered him to pay $5 million to a computer programmer who debunked his voter fraud claims. He also continues to fight defamation lawsuits filed by major voting machine companies over his false allegations.
In September, a California vendor sued Lindell, alleging he ignored bills totaling mid-six figures.
The following month, Lindell faced a similar issue with another cash advance company, Lifetime Funding, which claimed he owed $600,000 in receivables. In response, Lindell sued Lifetime, accusing the company of imposing an exorbitant 441% interest rate.
At the time, Lindell told The Independent, “We’re going after them. It’s all very illegal. There’s up to 1,000 percent interest—it breaks all kinds of laws.”