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Lender Moves to Seize ColorArt LLC, Accuses Executives of Misuse and Fraud in $26M Loan Default
Eureka, Missouri – October 9, 2025 In a stunning turn for one of Missouri’s long-standing commercial printers, ColorArt LLC is facing a potential forced takeover after defaulting on a $26 million loan, with its lender, Aequum Capital, accusing company leadership of financial misrepresentation, diversion of funds, and obstruction. The lawsuit, filed by Aequum Capital, paints a picture of a company in freefall—led by executives who, the lender claims, inflated assets, siphoned money to affiliates, and then stonewalled investigators as the business unraveled.Shocking Allegations Against Leadership
According to the complaint, ColorArt’s management overstated accounts receivable by roughly $2 million, giving a false impression of liquidity and stability. Even more explosive are the allegations that funds were diverted away from the company’s core operations and funneled into affiliated entities, raising serious questions about internal controls and possible self-dealing. “These aren’t simple accounting errors,” one source close to the case told reporters. “This looks like a deliberate attempt to mislead the lender and protect personal interests while the company was crumbling.” Aequum also alleges that ColorArt refused to provide key financial documents, further fueling suspicions of a cover-up and deepening the company’s legal jeopardy.
Disturbing Findings at the Eureka Facility
During a recent on-site visit, Aequum representatives discovered what they described as a shell of the business ColorArt claimed to be—idle machines, minimal staff, and an eerie quiet that contradicted the company’s public narrative of operational consolidation and growth. “ColorArt told us they were streamlining and scaling up,” the lender stated in its filing. “What we found instead was a near-abandoned facility and no evidence of sustainable operations.”
Takeover and Receivership on the Table
Aequum is now seeking a court-appointed receiver to seize control of ColorArt’s assets and operations—essentially pushing the current leadership aside. If granted, this would allow the lender to liquidate the business or attempt a turnaround under new management, a move that could mark the end of ColorArt as it’s currently known. With over $25 million at stake and potentially fraudulent conduct in play, the lawsuit is more than a financial dispute—it’s a cautionary tale of what happens when corporate governance breaks down and oversight is ignored. As legal proceedings gear up, ColorArt’s leadership could soon face not just financial fallout, but deeper scrutiny over their role in what some are calling a slow-motion collapse of their own making.
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