Mike Lindell, the CEO of MyPillow, has found himself embroiled in a legal battle with Lifetime Funding, a financial services company. The dispute centers on a merchant cash advance agreement worth $600,000 that Lindell and his associated companies claim was usurious and violated both federal and state laws. The arrangement, which was finalized in September 2024, requires Lindell’s companies to repay $16,800 daily, a schedule Lindell argues is financially untenable.
In response to Lindell’s legal action, Lifetime Funding has filed a motion to dismiss, asserting that the transaction in question was not a loan but rather an agreement for future receivables. The company further contends that Lindell has actually benefited from the deal. According to their filing, MyPillow received an advance of $563,965, but the company has already paid back $268,800, leaving a balance of $295,965 that MyPillow has gained rather than lost. Lifetime claims that Lindell’s suit is based on a misunderstanding of the terms, pointing out that Lindell has already profited from the deal and that his claims of financial harm are unfounded.
Lindell’s legal team, however, insists that the agreement constitutes a loan and that the terms violate both federal racketeering laws (RICO) and usury laws, which are designed to protect against excessively high interest rates. In his lawsuit, Lindell argues that the terms of the deal, under which the daily payments far exceed the initial advance, should be classified as usurious, and the contract should be unenforceable. He also asserts that the lending arrangement is part of a broader pattern of unscrupulous business practices, with Lifetime and similar companies preying on struggling businesses.
Lifetime Funding’s legal team, however, takes aim at Lindell’s RICO claims, ridiculing them as unsubstantiated and “half-hearted.” They argue that Lindell’s lawsuit fails to present specific, concrete evidence of a pattern of racketeering activity, and that his claims under the RICO statute, which is typically used to combat organized crime, are baseless in this context. The lender further argues that Lindell’s claims of unconscionability another legal theory he’s using to challenge the deal are without merit. They note that Lindell, as a well-known businessman with extensive experience, is hardly the “commercially illiterate consumer” that the unconscionability doctrine is designed to protect.
In their memorandum, Lifetime insists that Lindell, with his extensive business acumen and high-profile connections, is well-equipped to understand the terms of such agreements. The company’s legal team argues that the unconscionability claim is fundamentally flawed because it assumes that Lindell is a naive, unsophisticated party. Instead, they characterize him as a savvy businessman who, in their view, had the means to negotiate a better deal but chose to enter into the arrangement willingly.
Additionally, Lifetime’s legal team dismisses Lindell’s argument that New York’s usury laws should apply, pointing out that the agreement does not fall under the definition of a loan in the first place. Even if the court were to apply New York law, Lifetime asserts, the agreement is not usurious under those statutes, making Lindell’s claims on that front irrelevant.
In their motion, Lifetime calls the entire lawsuit “preposterous,” arguing that Lindell’s failure to continue paying the receivables and his attempt to challenge the agreement is more about evading his obligations than about seeking justice for any legal wrongdoing. The company contends that Lindell’s claims are unfounded and should be dismissed with prejudice.
As the case moves forward, the court will have to decide whether Lindell’s legal theories hold water. While Lifetime has forcefully argued that Lindell has no valid grounds to challenge the contract, Lindell and his team are pushing back, accusing the financial services company of predatory lending practices. Whether the court agrees with one side or the other will have significant implications for the future of merchant cash advances and the interpretation of laws governing these types of agreements.
This legal battle is one of several that Lindell has initiated against similar companies, accusing them of issuing usurious loans under the guise of merchant cash advances. Lindell has framed these lawsuits as part of a broader effort to challenge what he sees as exploitative business practices in the financial services industry, particularly in relation to companies that offer high-interest, short-term funding to struggling businesses. The outcome of this case will likely provide important legal precedents regarding how these types of agreements are treated under the law.
