The state’s largest cider producer, Seattle Cider, has sued its founder and ex-CEO, alleging that to boost a payout from its new owner by $6.8 million earlier this year, he juiced the numbers.

Joel VandenBrink sold Seattle Cider and the affiliated Two Beers Brewing in 2016 to the big French agricultural cooperative and cider producer Agrial. The sale was structured to pay him and his minority partners $20.4 million, plus additional amounts if he hit projected targets in coming years.

The lawsuit alleges that VandenBrink this spring got a $6.8 million follow-up payment he didn’t deserve by arranging “a secret side deal with Seattle Cider’s largest distributor” to inflate last year’s sales. He then submitted false 2018 financial statements to the new owner, according to the suit filed in federal court in Seattle.

The subterfuge unraveled when the distributor balked at further shipments, saying it had already accepted more than a year’s worth of inventory to facilitate the scheme, the suit claims.

An attorney for VandenBrink, who is no longer CEO, said he had no comment but “looks forward very much to having his say about the matter in court.”

Tactics such as those alleged in the suit are sometimes called “channel stuffing.” At publicly traded companies, the Securities and Exchange Commission has repeatedly gone after executives who did that to meet financial targets and maximize their bonuses or stock value.

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Seattle Cider last year produced almost as much as the next two largest independent cider makers combined, according to Washington State Liquor and Cannabis Board data.

The lawsuit cites an email from an employee of the distributor, which is not identified, complaining to VandenBrink that as of February “we already had nine months of inventory and yet you still shipped ten more loads in March and one in April. We have 493 days of supply of semi-sweet. This is far beyond any agreement we made … we agreed to take up to four months of inventory to help you hit your number and get your paycheck.”

The scheme involved persuading the distributor “to accept huge shipments at the end of 2018, roughly triple the normal shipments,” so he could book them as sales and make the target number, the suit contends. VandenBrink promised Seattle Cider would absorb the costs of the extra orders.

Meanwhile, according to the suit, VandenBrink was telling his bosses at Agrial that “Cider had another great month” in December and submitting financial reports “greatly overstating” its results. When the distributor refused to take any more cider shipments in early 2019, VandenBrink invented excuses and continued to make “false and misleading” projections as he awaited the earn-out payment.

Then, “just two days after VandenBrink received his millions, the distributor returned two full trucks of cider” and destroyed additional inventory, according to the suit.

One result of the alleged channel stuffing was that when VandenBrink had projected sales of $1.3 million in May, actual sales were nearly $1 million less, “the worst performance of any month” since Agrial bought the company.

Another result, according to the suit, a deal to sell Seattle Cider was damaged: “After the sudden collapse of Seattle Cider’s revenue, the deal fell through at a substantial loss to Agrial.”