Ousted business partner claims he owns more of Reditus Labs than Rossi

PEKIN (WEEK) - An ousted business partner now claims he owns a majority stake in Reditus Laboratories and is asking a Tazewell County judge to weigh in, according to new court filings obtained by 25 News Thursday.

Lawyers for Dr. James Davie say Rossi does not own 66.66% of Reditus, as he claims. Rather, Dr. Davie’s attorneys say Davie owns 55.56% of Reditus, and Rossi owns 44.44%.

Dr. Davie argues original agreements from 2019 between Dr. Jerry Paul, Rossi and Rossi’s half-brother Rodney Bare make Reditus an offshoot of PAL Health Technologies. Davie’s attorneys say the 66.66% ownership stake in Reditus that Rossi claimed actually belonged to the three of them, split 40-40-20 just like their stakes in PAL.

Rossi said he was holding Bare and Dr. Paul’s Reditus equity of 40% total ‘in trust.’ In text messages attached to the fillings, Rossi repeatedly assures one of the PAL partners that their stake in Reditus is secure.

Rossi eventually bought out both Paul and Bare, but he apparently did it with Reditus Labs money. Thus, the attorneys for Dr. Davie argue the 40-percent of their stake in the company must be split proportionally between Rossi and Davie, leaving Davie the majority owner.

“If Reditus money was used to buy us out and that’s how the ownership was to flow through, that’s the correct amount,” Bare said in a sworn statement taken in April.

The legal argument Dr. Davie’s team is putting forward seems to rest on whether he is still a recognized partner in Reditus. In a statement sent to 25 News Thursday, Rossi’s spokesperson calls that assertion into question.

“These are desperate claims, written and timed to continue to try this case in the media,” spokesperson Natalie Bauer Luce said. “We look forward to having our day in court, and we question what ownership, if any, Dr. Davie has in Reditus.”

The lawsuit, originally filed in 2019, alleges in-part widespread financial wrongdoing by Rossi, funding an over-the-top lifestyle for himself and accuses him of shutting out his business partners. Rossi was removed from day-to-day operation of Reditus Labs back in May, when a receiver was appointed to oversee the company. It’s unclear what would happen to the receiver if the judge rules in favor of Davie as his attorneys are also asking for a declaratory judgement in the latest filing. It’s also unclear when the court might take up this matter.

In his sworn statement, Bare says he settled with Rossi and does not hate him. Although Bare says he believes Aaron is a narcissist and is mentally ill.

“I am here because yes, accounting firms, banking firms, lawyers, this cannot be allowed to happen,“ Bare said in his sworn statement. “You cannot pull people together in a cabal like this, or a Mafia hit group and just steamroller over everyone; the law, you know, partners... I don’t want to sound too grandiose, but there’s something wrong going on here. There’s something rotten in the middle of this, and it has to be exposed and cut out.”

Rossi is also facing a federal tax fraud indictment for on his 2015, 2016 and 2017 filings. He entered a plea of not guilty earlier this month. His trial date is set for September but both Rossi and his public relations person say the tax fraud charges are baseless and are a result of his success. But the Illinois Department of Financial and Professional Regulation is also seeking to remove his surgical assistant’s license, which expires May 31. Those charges allege Rossi wrote multiple unauthorized prescriptions for opiates and other controlled substances and also committed thousands of dollars in unauthorized spending from when he worked as the office administrator at Central Illinois Orthopedic Surgery ending in 2018.

The latest court filings made by attorneys for Dr. James Davie and his business (DAAD) in the case against business partner Arron Rossi appear in the windows below this story.

Copyright 2022 WEEK. All rights reserved.