Dakota Labs, part of the HRA Group’s lab-grown diamond division, has filed a lawsuit against Huron Capital, the previous owner of WD Lab Grown, alleging it was misled about WD's financial health. According to Dakota, WD entered a contract in 2021 for cutting and polishing services, promising monthly payments of $109,417 for work at its Toronto facility and $180,000 for using a Vietnam-based factory.
Dakota claims that WD executives represented the company as financially stable, backed by Huron, a large private equity firm. However, by 2023, WD was unable to meet its payment obligations, leading Dakota to file claims against WD in British Columbia. At the time of WD's bankruptcy, it reportedly had over $44.7 million in liabilities but only around $3 million in assets.
Following WD's bankruptcy in late 2023, its CEO, Michael Grunza, along with other former executives, formed a new entity named WD Advanced Materials, which Dakota argues is essentially the same business with similar leadership. Dakota's suit also targets Huron Capital, asserting that WD operated entirely under Huron's control, with board members closely tied to the equity firm. Huron Capital declined to comment on the matter.