Tropical Beverage has filed a lawsuit against The Nutmeg Group and 500 unnamed defendants accused of planning to illegally obtain Tropical shares and force the resignation of its board.

Tropical is seeking damages for past and future lost profits in excess of US$20m and $80m in punitive damages. The producer and distributor of water-based beverages is taking its case to the Superior Court in California.

Tropical is accusing Randall Goulding, managing director of offshore investment group Nutmeg, of dumping millions of shares of stock and thus driving share price down. The suit further alleges that Goulding threatened to go public with information he knew to be false, allegedly saying he would sue Tropical unless it signed what the company term a "death spiral" agreement. The agreement would have required the resetting of a stock price enabling a 70% takeover, according to Tropical.

The company's CFO Chris Lotito said: "Unfortunately, the legal and financial costs of such organised attacks, along with the negative reaction by the public and investment community weakens companies victimised by such tactics such that there are few choices but to submit to what is, in essence, financial terrorism.

"We will vigorously pursue these people, expend whatever resources are necessary, and are confident that in the end, we will not only prevail but recover appropriate damages."