When one company interferes with another company, we sometimes call it friendly competition. Other times, we call in the lawyers and begin a course of business litigation. There is sometimes a fine line between competition and active interference with other business relationships that can lead to claims of tortious interference and litigation.
The complexities of these types of situations have recently been demonstrated in a recently filed case involving an owner of one business that filed bankruptcy and was liquidated and a newer startup that has had its own share of controversy.
A company named Plastech claims it had an exclusive agreement with a Chinese carmaker, JAC Motors, to distribute JAC’s electric cars. They allege WM Green Tech Automotive Corp. interfered with that agreement, and signed their own agreement with JAC.
Green Tech claims there was no contract between Plastech and JAC, and that Plastech has yet to produce a copy of the contract. Plastech has claimed there is a confidentiality agreement tied to the contract that prevents its disclosure.
Other issues involve poaching of an executive vice president from Plastech by Green Tech, who would have had knowledge of the agreement.
The tangled web becomes more tangled with the background of Green Tech, which was started by the politically well-connected Terry McAuliffe, who is also the Governor of Virginia. It has had various financial operational difficulties.
And speaking of financial difficulties, Plastech, in its current incarnation is a rebirth of a similarly named company that went bankrupt when Chrysler LLC, which was its largest customer, cancelled numerous contracts over quality control issues.
According to a story in Crain’s, the company also had questions of nepotism, with nine family members on the payroll prior to the bankruptcy filing, with earnings of $6.4 million between them.
Most business litigation is usually more mundane, and tortious interference is routine, but one attorney noted that this case “reads like a novel.”
Autonews.com, “Chinese car import deal draws U.S. litigation,” Dustin Walsh, Crain’s Detroit Business, November 10, 2014