MCM Obtains Judgment For Fraud Against Equipment Lessor
In a decision rendered on June 17, 2010 by the United States District Court in Maine, Judge Hornby found that Tetra Financial Group had committed fraud when negotiating an equipment lease with MCM client House of Flavors, Inc. House of Flavors is a manufacturer of bulk and speciality ice creams with its executive offices in Portland, and manufacturing facilities in Michigan. In 2006, House of Flavors sought bids for equipment financing for new ice cream manufacturing equipment that it needed. Negotiations ensued with Tetra Financial Group, which offered advantageous terms, based upon representations regarding the end of lease purchase price for the equipment. When lease end came, Tetra refused to honor the represented price. After trial, the District Court found that Tetra had committed common law fraud, and ordered recision of the transaction. Under Judge Hornby’s order, House of Flavors will retain the equipment it leased, and will receive a refund from Tetra for all amounts paid over and above the “principal” advanced by Tetra, and an imputed interest rate as determined by the Court. Lead trial counsel for House of Flavors were MCM partners Lee Bals and Jennie Clegg. Paralegal assitant Karen Stone did her usual fine job in keeping the trial team organized and on target.