June 15 – LAWFUEL – The Law News Network – Davis Wright Tremaine filed a legal complaint today on behalf of Jon Stocking, founder of the award-winning and environmentally-friendly Oregon business Endangered Species Chocolate Company (ESCC), against an Indiana firm he alleges is engaged in a hostile takeover attempt.
The complaint filed today alleges that Randolph Deer and Wayne Zink of Indianapolis, Indiana, principals in The Raintree Group LLC and DZ Enterprises, have engaged in fraud, civil racketeering and breach of contract in an attempt to secure control of ESCC and oust its president and founder.
“Jon Stocking has alleged that it was the defendant’s intention from the beginning to contrive reasons to force Stocking out of Endangered Species Chocolate Company and to acquire it for well below their fair market value,” said David Rocker, an attorney at Portland’s Davis Wright Tremaine law firm.
Stocking, who founded ESCC in Talent, Oregon, 12 years ago, is an Oregon success story. He created a socially responsible company to make all natural chocolate products and in the process raise environmental awareness. In addition to naming chocolate products in honor of endangered species, his company has donated more than $150,000 worth of products to non-profits such as the Jane Goodall Institute and the National Wildlife Federation, helping them raise funds and awareness. With annual sales now at $5 million, ESCC’s growth this week is being recognized by the The Business Journal of Portland, which is honoring Stocking with its Lighthouse Award for earning a place on the Fastest-Growing Private 100 Companies list for five consecutive years.
In January 2005, Stocking sold a portion of ESCC to The Raintree Group LLC under an agreement that ensured he would remain as president while the company grew. Instead, Stocking alleges The Raintree Group engaged in an intense effort to oust him from his position, eventually firing him April 22, just 99 days after the sale was complete.
“I entered into a partnership agreement in good faith which I believed would allow me to grow and run the company that I built and nurtured, while allowing me to spend more time with my family,” said Jon Stocking, president and founder of Endangered Species Chocolate Co. “Instead, that trust has been blatantly violated and my company has been taken from me. I want to warn all Oregon business owners to beware of the smiling wolf in sheep’s clothing.”
Stocking’s complaint contains nine separate claims including conversion for the taking or destruction of his personal property; statutory wage claim for unpaid wages; intentional infliction of emotional distress; fraud and tortious bad faith for leading Stocking to believe he would remain a key leader at the company; breach of fiduciary duty for terminating Stocking; and civil racketeering for redirecting, opening and reviewing Stocking’s personal mail.
Some of the most distressing allegations include the placing of an armed guard at the factory to trail Stocking, ransacking his office and destroying his children’s artwork in the process, firing him while he was undergoing elective surgery, and following and confronting his wife at their home to deliver the termination news while he was in the hospital.
As part of their takeover strategy, the Indiana principles, Zinc and Deer, filed a lawsuit in Indiana state court within hours of terminating Stocking on April 22. Stocking has responded today by refuting every allegation and by bringing a counter claim that it was in fact the Indiana principles that breached the contract. Zinc and Deer alleged in their complaint, for example, that Stocking failed to turn over recipes for the company’s chocolate products. In fact, the company continues to produce the same chocolate precuts it made prior to Stocking’s departure.
About Jon Stocking
Jon Stocking is the founder of Endangered Species Chocolate Company, which he started in Talent, Oregon, in 1992 to spread positive environmental and social messages through the sale of gourmet, organic and all-natural chocolate bars. A formally-trained chef, Stocking previously studied abroad in France and Germany. After completing his culinary training, Stocking returned to the U.S. where he spent several years operating a catering business in Hollywood. Stocking moved to Oregon in 1992. Under Stocking’s supervision and leadership, ESCC grew from a start-up company in 1993 to the industry-leading and award-winning company in the natural food sector.
Davis Wright Tremaine
David Rocker, 503-241-2300
davidrocker@dwt.com
