Articles · Lenders and fintech
Reported article
Blueacorn Won Against Capital Plus; the Arbitrator Said $19.8 Million Should Go to PayNerd
A federal judge in Phoenix entered judgment for Blueacorn against Capital Plus Financial in May 2025, on an arbitration award that is still sealed. Blueacorn's own filing says the arbitrator determined that $19,796,022.81 Capital Plus still held "is now payable," and that it should go to PayNerd, the marketing firm Blueacorn sued in 2021.
I. What Blueacorn told the court
Blueacorn's contracting company, Fin Cap, Inc., asked the federal court in Arizona to confirm the award on April 3, 2025 (application, D. Ariz. No. 2:25-cv-01122, Doc. 1). It described the deal in two sentences. Under the lender service provider agreement, Blueacorn "was responsible for identifying loan applicants, documenting and evaluating loan applications, and transmitting proposed loans to the Small Business Administration" for approval. Capital Plus "received fees from the SBA upon making the loans and was obligated to pay Blueacorn a share of these fees" (paras. 6–7).
Blueacorn filed for arbitration on March 21, 2023, over "CPF's failure to pay the fees." The arbitrator issued a "Confidential Final Award" on April 29, 2024, which Blueacorn attached under seal (paras. 8–9). The application then said what had become of the money:
"A portion of funds has been paid and resolved between CPF and Blueacorn" (para. 10). Capital Plus "continues to hold $19,796,022.81 in a liability reserve ('Liability Reserve') that the Arbitrator determined 'is now payable'" (para. 11). And "The Arbitrator stated that these amounts should be paid to a third-party vendor, PayNerd, LLC, 'absent evidence that PayNerd acknowledges the amounts may instead be paid to Blueacorn or a final determination in a proceeding to which PayNerd is a party ruling that Blueacorn is entitled to the funds'" (para. 12).
Blueacorn asked for confirmation anyway. Its lawyers wrote that it "will not resolve the dispute over the Liability Reserve, which will need to be addressed in a separate proceeding in which PayNerd is a party," but "will formally recognize the Arbitrator's determination that these funds 'are now payable' and are no longer properly held by CPF" (para. 14).
Everything about the award's contents comes from Blueacorn's description of a sealed document. The paragraphs it cites, 60 to 62, cannot be checked against the award itself.
II. What the court did
Capital Plus agreed to the form of the order. On May 20, 2025, the two sides lodged an "Agreed Form of Order Confirming Arbitration Award," signed for Capital Plus by its lawyer "with permission" (stipulated notice, Doc. 15). Judge Michael T. Liburdi signed it that day. The order confirms the award under 9 U.S.C. § 9, directs that "Judgment be entered in favor of Blueacorn and against Capital Plus Financial, LLC as described in the Final Award," and gives neither side its fees or costs (order, Doc. 16). The clerk's amended judgment of May 21 repeats the formula (amended judgment, Doc. 18).
None of the four filings states what the award is worth. The one sum in them tied to the award is the reserve.
III. The firm the reserve would go to
By a congressional committee's account, PayNerd was Blueacorn's largest expense. The House Select Subcommittee on the Coronavirus Crisis wrote that "$666 million of the $1.08 billion in taxpayer funded SBA processing fees that Blueacorn received—well over half of the total—went to Paynerd (also known as Paynerdier), a marketing company founded and operated by Blueacorn Strategic Advisor Matt Mandell and Blueacorn Chief Marketing Officer Taylor Hendricksen" (House report, Blueacorn Financials section).
Blueacorn wanted some of it back. Fin Cap and Blueacorn PPP, LLC sued PayNerd LLC, PayNerdier LLC, Mandell and Hendricksen in Delaware Superior Court on December 23, 2021. Blueacorn's lawyers told the Subcommittee the suit sought "to recover at least $175 million in payments it made to its principal provider of marketing services" (Subcommittee's Blueacorn documents, letter of Feb. 4, 2022, n. 1). PayNerd answered on December 21, 2022, with counterclaims against Fin Cap and Blueacorn and third-party claims against Nathan Reis, Noah Spirakus and Barry Calhoun. On August 16, 2023 the court let PayNerd's fraudulent-inducement and contract counterclaims go forward and denied Reis's motion to dismiss (Superior Court opinion; Court of Chancery opinion, which recites the history). Both sides' claims are allegations; the rulings decide only whether they were pleaded well enough to proceed.
In May 2024, Pay Nerd LLC used a commission from the Delaware court to obtain a Texas subpoena for Farzana Giga, the chief financial officer of Capital Plus and its parent, Crossroads. It was served on May 20 (Denton County District Court No. 24-4384-431, register of actions; her title is from the YXS complaint, para. 29). On April 3, 2025, Blueacorn told the Arizona court it was "presently in litigation with PayNerd in Delaware Superior Court regarding related issues that may resolve the disposition of the funds" (application, para. 13). The cases between Blueacorn, its founders, its lenders, its marketers and its bank, on one timeline.
IV. The Paynerd line in 2022
Capital Plus had put a figure against PayNerd's name before. On December 21, 2022 it sent Blueacorn a reconciliation of the fees it still owed at October 31, 2022. Blueacorn reproduced an excerpt of the summary page in an application for prejudgment writs that it filed in Tarrant County, Texas, in March 2023 (Fin Cap, Inc. v. Capital Plus Financial LLC, No. 352-341122-23, para. 19; we do not have a court copy). One line reads "Paynerd": $21,746,478.66.
In that filing Blueacorn counted the Paynerd line, with the lines "BA Fee," "BA Holdback" and "BA Womply Fees," among the "fees Capital Plus owed to Blueacorn, totaling more than $101 million" (para. 19). It also said Capital Plus had paid Blueacorn's share "either directly to Blueacorn, or, at Blueacorn's direction, to referral agents with whom Blueacorn had contracted" (para. 17).
The reserve is $1,950,455.85 less than the Paynerd line. No document says the reserve and the line are the same money; that is our reading of two figures. Each line of the December 2022 list, and what later happened to it.
V. What Capital Plus's books show
Crossroads Impact Corp. reports for the group, and its consolidating statements put the PPP fee lines in Capital Plus's column. Its audited statements for the year to October 31, 2023 said: "Prior to the arbitration, the Company had accrued $80 million in fees due to BlueAcorn. While the Company disputes that these amounts are owed, the Company has maintained this accrual pending the outcome of the arbitration" (FY2023 audited financials, note 19).
The award is dated April 29, 2024, the day before Crossroads' fiscal second quarter ended. For those three months the group's expense line "PPP processing fees" came to a credit of $15,005,881 (Q2 FY2024 statements). Capital Plus's accrued liabilities fell from $94,715,244 at April 30 to $69,978,515 at July 31, 2024 (Q2 and Q3 FY2024 statements, consolidating balance sheets). The quarterly statements carry no notes and give no reason for either change.
The December 2022 list has a "BA Holdback" line of $15,005,951.01, $70.01 more than the credit. That match is our reading, not stated in any document.
VI. What is not known
The award's total is sealed, and no filing says how much of it Capital Plus has paid. We have not read Crossroads' statements after July 31, 2024, so we do not know whether Capital Plus still holds the reserve. We do not have the Delaware docket after 2024, so we do not know whether that court has ruled on who gets it.
Capital Plus was not the only lender to end up in arbitration with a Blueacorn company. BA PPP Fin, LLC signed Blueacorn's agreement with Prestamos CDFI. On January 8, 2026 it asked the Maricopa County Superior Court to confirm an arbitration award in its dispute with Prestamos, and the court entered a final judgment on February 2 (register of actions, No. CV2026-001079). The register gives no amount, and we do not have the filings.
The amended judgment that ended Blueacorn's case against Capital Plus finishes with the sentence "This action is hereby terminated." It names no amount.
Method, and what would settle it
Whose words. The court's words are the order and the judgment (Docs. 16 and 18). Everything about the award's contents, the reserve and PayNerd comes from Blueacorn's application (Doc. 1), which describes a sealed award; Capital Plus agreed to the form of the order (Doc. 15) and filed nothing describing the award. The December 2022 figures are Capital Plus's reconciliation as Blueacorn reproduced it in Texas. The Crossroads figures are the company's own statements. The differences between figures are our arithmetic, and the two matches in sections IV and V are our reading.
Documents that would close the gaps. The sealed Final Award; the Delaware Superior Court docket after 2024; Crossroads' financial statements for fiscal 2024 and 2025; a court copy of the Tarrant County application; the BA PPP Fin application and judgment in Maricopa County.
Sources: D. Ariz. No. 2:25-cv-01122: application (Doc. 1), stipulated notice (Doc. 15), order (Doc. 16), amended judgment (Doc. 18). Crossroads Impact Corp.: FY2023 audited financials, Q2 FY2024 statements, Q3 FY2024 statements. Delaware: Superior Court opinion (Aug. 16, 2023), Court of Chancery opinion (Jan. 29, 2024). House report (Dec. 1, 2022) and the Subcommittee's Blueacorn documents. YXS complaint (N.D. Tex. No. 4:24-cv-00664). BA PPP Fin v. Prestamos register. Cited without a link, because we do not have a copy we can publish: Fin Cap, Inc. v. Capital Plus Financial LLC, Tarrant County No. 352-341122-23, application (file-stamped Mar. 23, 2023); Denton County No. 24-4384-431, register of actions. The House report is a partisan staff document released by the Democratic majority's staff in the final weeks of the 117th Congress, with no public hearing and no sworn testimony; an arbitrator refused it as "rank hearsay" that relied on companies then in arbitration with Womply, and a federal judge declined to take judicial notice of its findings (about the report).