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 user 2010-04-11 at 6:06:40 pm Views: 61
  • #23479
    $100M. BATTLE !

    Nukote has filed a
    $100 million lawsuit against rival cartridge manufacturer Clover
    TechnologiesFeelings are obviously running high in the dispute between
    aftermarket cartridge competitors Nukote and Clover after Nukote filed a
    lawsuit against Clover at the end of February in Texas seeking $100
    million in damages.Nukote’s filing comes as part of a dispute after
    Office Depot ended its 20-year supply relationship with Nukote last May,
    leading the vendor to file for Chapter 11 bankruptcy protection a month
    later (it came out of Chapter 11 in December).In a separate lawsuit
    filed in September 2009 against Office Depot, Nukote is seeking $217
    million in damages for what it calls “intentional and malicious acts” by
    Office Depot that breached a binding contract between the two companies
    and forced Nukote to file for Chapter 11.In that lawsuit, Nukote refers
    to Depot “secretly negotiating” with Nukote’s main competitor
    (Clover).Now Nukote has filed a second lawsuit, this time against Clover
    itself for its alleged role in attempting to put Nukote out of business
    by, among other things, getting Office Depot to switch suppliers.The
    lawsuit seeks damages on seven counts, including: civil conspiracy;
    tortious interference with contracts; unfair competition by
    misappropriation; and employee raiding.

    In brief, here are
    Nukote’s allegations against Clover:

    1. Clover had a co-ordinated
    plan dating back several years to monopolise the supply of aftermarket
    cartridges and collection of empties in the US in order to “drive Nukote
    out of business”.

    2. Clover induced Office Depot and other
    companies to breach their agreements with Nukote.

    3. Clover
    misappropriated Nukote’s trade secrets by the “targeting and raiding of
    key employees with secrets”.To their credit, both parties were willing
    to respond to OPI’s questions, though they are limited in what they are
    able to say because of the legal nature of the dispute.

    side, though, was mincing its words.

    In an initial press release
    issued a few days after the filing of the lawsuit, Clover accused
    Nukote of “abusing the court system in a transparent and desperate
    effort to raise capital for a business that is on the verge of
    collapse”, adding that Clover has been receiving “daily letters,
    e-mails, and phone calls from Nukote customers looking to secure a new
    supplier and Nukote employees desperately seeking job opportunities”.

    so, retorted Nukote spokesman, Russell Mack.

    “I think that
    Clover’s rantings in the press release that they put out are perfectly
    consistent with their behaviour that led to the lawsuit against them in
    the first place,” he told OPI in an email.”Nukote is alive and well
    [and] is conducting business normally – we’re manufacturing and shipping
    products, and we’re selling and serving our customers,” he continued.”I
    think everyone knows that a healthy Nukote is good for this industry.
    We’ve got the newest factory in the industry, in Monterrey, Mexico, with
    plenty of expansion capacity. We’ve restructured our finances and
    reorganised our team. We feel great about the future of our
    company.”With regards to the allegations themselves, Jim Cerkleski, CEO
    of Clover Holdings, maintained that all Nukote’s claims “have no
    connection to actual facts”, adding that their “sweeping allegations
    have literally no grounding in fact” and that it seemed “Nukote is
    proceeding with the notion that evidence is optional”.

    to some of the specific allegations, Cerkleski denied that his company
    had tried to muscle in on Nukote’s contract with Office Depot, telling
    OPI that is was the plaintiff which first contacted Clover about
    supplying them after Depot experienced supply issues with Nukote.”Office
    Depot conducted an open and fair selection process to satisfy their
    product needs,” he stated.Cerkleski also denied that Clover
    “relentlessly pursued” Nukote seeking a merger or buyout, though he
    admits that the issue had been discussed.”We have never had meaningful
    discussions that ever became serious”, he affirmed. “However, we
    certainly talked about the benefits of coming together. I have only met
    Mr Rochon [Nukote's Chairman] a handful of times in my life, of which
    one was at Office Depot when I told him we had decided to leave the line
    review in February [2009] after the first day.”

    The Clover
    Holdings CEO also said that only a handful of former Nukote employees
    are currently employed at Clover out of a total workforce of 3,700 and
    that they contacted Clover, not the other way round as alleged in
    Nukote’s complaint.Whatever happens, it is clear that Nukote has got its
    work cut out on the legal front, with two major lawsuits that could
    well drag on.

    The lawsuit with Office Depot, originally filed in a
    Tennessee bankruptcy court, is now in Federal District Court in
    Florida, Depot’s home state. A fact that “should make no difference”,
    according to Russell Mack.”Our case stands on its merits, regardless of
    the jurisdiction,” he stated.”We’re going to get justice for those who
    Clover has damaged,” he warned.  “It will be a long case, but we’ll
    pursue it all the way to the end, no matter how long it takes.”With
    Clover stating that it is “prepared to root out the source of any attack
    on our company and aggressively defend the integrity of our brand,” it
    looks like being a hard fought battle.