The $76 Million People’s Deal Ends in a $400,000 Settlement

Blum Holdings closed a $23 million fight with People’s California for a $400,000 allowed claim after a bankruptcy judge approved the deal on May 2, 2025. The settlement took effect on May 16, 2025. Unrivaled Brands, the subsidiary that bought People’s First Choice, was already in Chapter 11, and the docket later listed its liquidating plan as confirmed on June 15, 2026.

CEO Sabas Carrillo called the outcome a win and said he looked “expectantly to the future of Blüm.” The paper that actually closed paid People’s a small allowed claim from a Santa Ana building sale, dropped eight lawsuits, and locked People’s into supporting that liquidating plan.

Eight Cases Ended With a $400,000 Allowed Claim

People’s California and Unrivaled spent February 12, 2025, in an in-person mediation. U.S. Bankruptcy Judge Robert Kwan put the terms on the record. The parties signed definitive papers on March 27, 2025. The court that runs the Chapter 11 cases, with U.S. Bankruptcy Judge Sheri Bluebond presiding, approved the settlement on May 2, 2025.

Under those terms, People’s took a $400,000 allowed secured claim from the sale of Halladay Holding’s building. Another $1 million sat in an interpleader fight with a third-lien holder. On September 2, 2025, the court approved a split of that pot: $440,000 to People’s and $560,000 to the third-lien holder. All pre-petition suits and bankruptcy adversary cases between the parties were dismissed. People’s withdrew its motion to toss the Chapter 11 cases and agreed to support the debtors’ liquidating plan.

The February 24, 2025 release listed eight matters that would be “dismissed as to all parties with prejudice.”

THE EIGHT CASES THE DEAL WIPED OUT

• The $23 million contract suit: People’s California, LLC v. Unrivaled Brands, Inc., Orange County Case No. 30-2022-01270747-CU-BC-CJC.
• The first derivative case: People’s California, LLC v. Kovacevich, et al., Case No. 30-2022-01272843-CU-MC-CJC, aimed at former Unrivaled officers and directors.
• The second derivative case: People’s California, LLC v. Carrillo, et al., Case No. 30-2024-01416247-CU-PP-CJC, aimed at current Blum officers and directors.
• The defamation case: People’s California, LLC v. Carrillo, et al., Case No. 30-2024-01419068-CU-CO-CJC, against Blum and management.
• Unrivaled’s own contract case: Unrivaled Brands Inc. v. Bernard Steimann, et al., Case No. 30-2024-0138427-CU-CP-CJC, against Steimann and Troup Construction.
• The motion to dismiss Chapter 11: People’s bid to throw out Unrivaled’s bankruptcy, Case No. 2:24-bk-19127-BB.
• The removed $23 million fight: People’s California, LLC v. Unrivaled Brands, Inc., Adversary No. 2:24-ap-01274-BB.
• The avoidance action: Unrivaled Brands, Inc. et al. v. People’s California, LLC, Adversary No. 2:24-ap-01272-BB, seeking to claw back alleged preferential and fraudulent transfers.

That last bankruptcy lawsuit had asked for about $8.22 million in cash transfers made to People’s in the two years before the filing. It died with the rest of the docket. Unrivaled’s earlier state-court cross-complaint, which sought at least $5.40 million, went with it.

Unrivaled’s $76 Million People’s Bet Unwound in Court

The fight did not start in bankruptcy court. It started with a store.

On August 15, 2021, Unrivaled signed a membership interest purchase agreement with People’s California for People’s First Choice, the Santa Ana dispensary later run as Blüm Santa Ana. The company said the shop saw more than 1,000 average transactions per day and sat in a highly visible spot off the Costa Mesa Freeway. Management told investors the Santa Ana shop plus planned Los Angeles and Riverside stores would add more than $60 million of revenue in 2022. A later company release said the Santa Ana shop had generated almost $30 million of revenue in 2020.

The first closing came on November 22, 2021. Unrivaled reported an aggregate purchase price of $76 million, made up of $24 million in cash, a $36 million secured note, and 40,000,000 shares valued at $0.40 each. Owner was to keep a board observer seat. The observer named at closing was Francis Kavanaugh. A second agreement that same day covered People’s Riverside, People’s Los Angeles, and People’s Costa Mesa.

By April 2022 the parties were already rewriting payment dates. People’s California’s notice address on those letters was Bernard Steimann in Irvine. The company later said People’s is owned, directly or indirectly, by Steimann, Jay Yadon, and Frank Kavanaugh.

On July 19, 2022, People’s sued in Orange County Superior Court for breach of contract and bad faith, claiming at least $23 million. Unrivaled answered on September 20, 2022, with a cross-complaint seeking at least $5.40 million. A derivative case against then-officers, including the Kovacevich action, followed on August 1, 2022. That August, Unrivaled’s board brought in Adnant LLC and Carrillo as interim chief executive.

A binding term sheet on March 6, 2023, was supposed to end it. The court papers describe a $23 million package with an $8 million up-front piece: $5 million due in 90 days and a $3 million note tied to the Halladay building. People’s later tried to turn the leftover into a judgment of about $12.93 million. On June 28, 2024, the state court denied that request.

The Santa Ana shop did not wait. On June 10, 2024, Unrivaled sold its controlling stake in People’s First Choice to Haven Nectar, LLC for $22.54 million. After broker and trustee fees, People’s received $7,653,443 from that closing. With $800,000 paid on May 17, 2024, that haul exceeded the $8 million up-front number. Haven Nectar took operating control under a management agreement pending license transfer, and got a royalty-free right to the Blüm name at that shop for up to 18 months.

THE MONEY TRAIL FROM PURCHASE TO SETTLEMENT

When Unrivaled filed Chapter 11, the company said it had managed to reduce total liabilities by a net of $90.8 million, from $125.3 million in December 2021 to $34.5 million in September 2024, and that People’s had already taken more than $60.0 million of value since 2021. Those are the company’s figures. The 2025 settlement did not reopen them. It closed what was left.

The Santa Ana Building Sale Funded the Check

Halladay Holding, LLC owned the commercial building at 3242 S. Halladay Street in Santa Ana, a 0.94-acre lot with about 24,468 square feet of space in a two-story flex building put up in 1971 and renovated in 2020. Unrivaled used that address as its office. The 2023 term sheet had already pointed at the building as collateral for the $3 million note.

People’s recorded a notice of trustee’s sale on April 29, 2024, with a sale date of May 23, 2024. Unrivaled got a temporary restraining order, then a preliminary injunction that blocked the foreclosure and wiped out the prior attempt. The fight moved into bankruptcy when Unrivaled and Halladay filed on November 6, 2024, as jointly administered cases 2:24-bk-19127-BB and 2:24-bk-19128-BB in Los Angeles.

Within the first 30 days, the debtors won permission to sell the Halladay property free and clear of People’s disputed liens. The sale hearing was December 4, 2024. The sale order was entered December 6, 2024. Buyer was Gordineer LLC, under a purchase agreement dated November 16, 2023. The sale closed on February 14, 2025, two days after the mediation.

The liens listed against the property at filing were Orange County taxes of $239,795.98, a first deed of trust for LJ Capital Partners and others of $2,752,828.44, People’s disputed second deed of trust of $3,000,000, and a third deed of trust for Dominion Capital and others of $1,000,000, a stack of $6,992,624.42. People’s second-lien figure was the fight. The settlement cut that fight to the $400,000 allowed claim paid from net sale proceeds, with the extra $1 million sent to interpleader and later split with the third-lien holder.

People’s had also filed, on January 7, 2025, a motion to dismiss the Chapter 11 cases. Hearings slipped while the parties talked. The motion came off the calendar as part of the global deal.

What a 1542 Waiver Means for Carrillo

The cash was the smaller half of the bargain. The releases were the rest. Kwan’s transcript, as quoted in Blum’s February 24, 2025 exhibit, made People’s support for the Chapter 11 plan an express term and then spread waivers across both camps, including current officers.

There’ll be a full and general release, a mutual release between the parties with 1542 waivers for the Debtors, the People’s parties, officers, directors, managers, agents, past and present, and attorneys, professionals, affiliates, subsidiaries, and parent companies on both sides.

Transcript of proceedings before U.S. Bankruptcy Judge Robert Kwan, Case No. 2:24-bk-19127

A 1542 waiver, in California settlement practice, is the clause that stops a party from later saying it did not know about a claim when it signed the release. The transcript put those waivers on officers and directors, past and present. That language reached the Kovacevich derivative case against former Unrivaled leadership and the 2024 derivative case against Carrillo and current Blum directors. The defamation case against Blum and management went out on the same list.

Carrillo, who has been chief executive and chairman, framed the deal as a finish line.

We are very pleased with the outcome and terms of the settlement and look expectantly to the future of Blüm.

Sabas Carrillo, Chief Executive Officer, Blum Holdings press release, February 24, 2025

The future he pointed to was not a reorganized Unrivaled. The plan People’s agreed to support was a wind-down of that subsidiary. Blum, the parent, kept its name on the OTCQB under the symbol BLMH and kept the stores and brands that were not in the estate.

The Parent Company Outside the Bankruptcy

The Chapter 11 filing is limited to Unrivaled and Halladay. Blum Holdings and its other operations were not debtors and, the company said, kept running in the ordinary course. Because the court, not the parent, controls the debtors, Blum took Unrivaled and Halladay off its books as of November 6, 2024. It recorded a deconsolidation gain of $20.79 million. It had also issued a guarantee on Unrivaled and Halladay accounts payable of $6.96 million, booked at fair value.

That structure is why a settlement that liquidates Unrivaled can still be sold as a Blum event. The public company is the parent. The estate is the old operating company and the building subsidiary. Creditors of Unrivaled do not automatically become creditors of Blum. Blum shareholders do not automatically share in the Halladay sale. Under the plan, Blum’s equity in Unrivaled is cancelled, and anything that equity might have received goes to the liquidating trust.

BLUM HOLDINGS AT SEPTEMBER 30, 2025

• Nine-month revenue: $10.565 million, against $9.933 million a year earlier.
• Cash: $388,000, down from $1.040 million at year-end 2024.
• Balance sheet: $45.081 million of assets against $52.349 million of liabilities, with a stockholders’ deficit of $11.879 million.
• Headcount: 107 employees as of April 15, 2026, with common stock still quoted on the OTCQB as BLMH.

The parent still has a cannabis retail and brand business, including Korova. It also still has a tax bill. Current income taxes payable were $10.904 million at September 30, 2025, with another $13.500 million in accrued income taxes. Those figures sit on Blum’s books, not in the Unrivaled estate. A later Fairway Medical Plaza complaint, filed March 5, 2025, in Alameda County, named Unrivaled, Blum San Leandro, and Blum Holdings together. The People’s deal does not speak to that case.

A Liquidating Plan Confirmed in June 2026

Unrivaled and Halladay filed a joint liquidating plan on February 4, 2025, eight days before the People’s mediation. The plan is a wind-down. It pays a pot of cash after the effective date and then parks remaining assets in a liquidating trust. The debtors do not get a discharge. No official creditors’ committee was formed, and no trustee was appointed before confirmation. Case summaries list 100 to 199 creditors, estimated assets of $10,000,001 to $50 million, and estimated liabilities of $1,000,001 to $10 million.

The February plan described a liquidation plan with a pot plan distribution and a trust to sell leftover assets. General unsecured claims at Unrivaled, Class 7, were estimated at about $32.5 million, subject to objections, and were to take a pro rata slice of a GUC distribution. Blum’s equity in Unrivaled, Class 9, was impaired and presumed to reject. Those interests were to be cancelled. People’s scheduled a $14,821,140 claim against Unrivaled that the claims chart later marked settled at $0, consistent with the $400,000 Halladay treatment.

The 10-Q for the quarter ended September 30, 2025, still said the court had not approved the disclosure statement or confirmed the plan. The debtors then filed an amended joint plan on January 28, 2026, and another amendment on March 18, 2026. The court approved the disclosure statement at a hearing on March 31, 2026. Confirmation, once set for June 4, 2026, is listed on the docket as entered on June 15, 2026. Post-confirmation papers were still hitting the docket in July 2026, including a July 13, 2026 order on a stipulation among the liquidation trustee, Dominion Capital LLC, and M2B Funding Corp.

THE BANKRUPTCY CALENDAR

1. November 6, 2024: Unrivaled Brands and Halladay Holding file Chapter 11 in Los Angeles.
2. December 6, 2024: The court enters the Halladay building sale order, free and clear of People’s disputed liens.
3. February 4, 2025: The debtors file their first joint liquidating plan.
4. February 12, 2025: Mediation produces the People’s settlement on the record.
5. May 16, 2025: The settlement goes into effect after the May 2 approval order.
6. March 31, 2026: The court approves the amended disclosure statement.
7. June 15, 2026: The docket lists the liquidating plan as confirmed.

People’s California came out of 2021 with a signed $76 million deal for a flagship Santa Ana shop and a path into more Southern California licenses. It came out of 2025 with the shop sold to someone else, a $400,000 allowed claim on the old office building, $440,000 more from a lien fight, and a promise to back a plan that wipes Unrivaled’s equity. Blum came out with the lawsuits off the calendar, its officers under a 1542 release, and a parent company that never entered the case. Unrivaled came out as a liquidating estate.

Frequently Asked Questions

How much did People’s California collect from the 2025 bankruptcy settlement?

The allowed Halladay claim was $400,000, and People’s later took $440,000 of a $1 million interpleader pot after a September 2, 2025 mediation award with the third-lien holder. That 2025 cash sits on top of earlier term-sheet money, including $7,653,443 wired from the June 10, 2024 People’s First Choice sale and $800,000 paid on May 17, 2024, which together already cleared the $8 million up-front figure. A $14,821,140 People’s claim scheduled against Unrivaled was marked settled at $0 once the Halladay treatment was in place.

Did Blum Holdings file for bankruptcy with Unrivaled Brands?

No. Only Unrivaled Brands, Inc. and Halladay Holding, LLC filed, on November 6, 2024, as jointly administered Los Angeles cases 2:24-bk-19127-BB and 2:24-bk-19128-BB. Blum Holdings stayed outside the estate, kept operating, and took the two debtors off its consolidated books, while leaving in place a $6.96 million parent guarantee on certain Unrivaled and Halladay accounts payable.

What did Unrivaled pay for People’s First Choice in 2021?

The November 22, 2021 closing 8-K reported $76 million of aggregate purchase price, built from $24 million of cash, a $36 million secured note, and 40,000,000 shares valued at $0.40 each, with 80 percent of People’s First Choice transferring at the first closing and 20 percent at a second closing. Francis Kavanaugh was named as People’s board observer at that closing, and a same-day second agreement added People’s Riverside, People’s Los Angeles, and People’s Costa Mesa.

When did the court confirm Unrivaled’s liquidating plan?

The docket lists the plan as confirmed on June 15, 2026, after a March 31, 2026 disclosure-statement approval and amendments filed January 28, 2026, and March 18, 2026. No official creditors’ committee was formed, no Chapter 11 trustee was appointed before confirmation, and case summaries put the estate in the 100-to-199 creditor band with estimated assets of $10,000,001 to $50 million.

The Halladay Street building is sold. The Santa Ana dispensary trades under new owners. The $23 million complaint is dismissed. And the subsidiary that wrote the 2021 check is, as of the June 15, 2026 docket entry, a confirmed liquidating estate.

Disclaimer: This article is news reporting and analysis of public court papers, company filings, and press statements. It is for information only and is not investment advice, legal advice, or a recommendation to buy, sell, or hold Blum Holdings, Unrivaled Brands, or any related security. Readers who are considering a position in BLMH, a claim in the Unrivaled or Halladay cases, or any other action tied to these facts should consult a licensed financial adviser, bankruptcy counsel, or other qualified professional who can review their own situation. Figures, case statuses, and plan terms reflect the cited filings and docket entries as those documents stood, and they can change with later orders, amendments, or trading.