Detroit Free Press | 2 December 2025Hawaii coffee deal brews suit for Michigan municipal retirement fund
by Paul Egan
A Lansing-based organization that manages employee retirement plans for Michigan local governments lost $100 million on a coffee-growing venture in Hawaii and fraudulently misled a lender into contributing $40 million to the project before abandoning it, according to a lawsuit filed Monday, Dec. 1.
The lawsuit, filed in Polk County, Florida, accuses the Municipal Employees' Retirement System (MERS) and other defendants of fraudulent misrepresentation, negligent misrepresentation and conspiracy.
In an emailed statement on Dec. 2, MERS CEO Kerrie Vanden Bosch said the claims in the lawsuit are "baseless and without merit, and we fully reject these false allegations.”
MERS, which according to its website manages employee retirement plans for more than 1,000 Michigan local governments and holds more than $18 billion in assets, was the major investor and in control of the Kona Hills coffee project in Hawaii, the suit filed by AgAmerica LLC of Florida alleges.
The Michigan-based nonprofit, along with other defendants, induced AgAmerica "to finance tens of millions of dollars to fund a purportedly reasonable and prudent development of a coffee plantation, while concealing that a significant portion of the loan proceeds was intended to remediate undisclosed, significant, and material environmental, legal, permitting, stormwater, wastewater, flooding, grading, grubbing, and construction issues at or affecting the property," the suit alleges.
MERS walked away from the coffee project early this year, the suit alleges.
In an emailed statement, AgAmerica CEO Brian Philpot said it is "shocking that MERS, a fiduciary for thousands of Michiganders and their retirement funds, would lose over $100 million in a start-up coffee farm." Philpot said he hopes the lawsuit "will allow AgAmerica, its investors, and employees to recoup the money we are owed.’’
Vanden Bosch said that as a fiduciary for the retirement plans of Michigan’s public servants, "we are committed to holding our investment managers to the highest standards of integrity and ensuring they act in the best interests of our participants.”
She said MERS invested less than 0.5% of its portfolio in Kona Hills. "While this specific investment experienced a loss, it was more than offset by strong gains in other private market investments," Vanden Bosch said. "Overall, the MERS Total Market portfolio has earned 15.04% year-to-date as of Nov. 28.”
According to the lawsuit, one neighboring property owner sued in 2024, alleging that illegal grading on one of the coffee properties caused severe flooding that collapsed rooms in his home and made parts of it uninhabitable. It's not clear that MERS was named as a defendant in that lawsuit.
Also named as defendants in the lawsuit are Atlanta-based Domain Capital Advisers LLC; Carolyn Seabolt, who is Domain's chief operating officer; Kona Hills LLC; Mark McCormick, who is described in the suit as a California resident and former CEO of Kona Hills; Kona Capital Partners LLC, and Kamco Land Co. Inc.
Calls and emails to Domain Capital were not immediately returned Dec. 2. The other defendants could not be reached for comment.
