Continuing a remarkable streak of victories, New York partner Richard De Palma and his team have won another victory in a jury trial, culminating in an award to our clients of almost $10 million.
In the case before the U.S. District Court for the Southern District of New York, in Manhattan, Recticel Foam Corp., Inc. v. Bay Industries, Inc. and SAC, Inc., Coudert Brothers represented Recticel, a division of the multinational Belgium-based Recticel conglomerate primarily engaged in the foam and foam-related products industry. Recticel brought suit against Bay Industries and SAC, Inc., insulation manufacturers based in Green Bay, Wisconsin, seeking damages and specific performance of the defendants’ agreement to purchase a Recticel entity.
The parties reached an agreement under which Recticel would sell its Soundcoat unit, an acoustical insulation manufacturer based on Long Island, to Bay Industries for US$11.7 million. The transaction was scheduled to close March 30, 2001.
After a two-week trial and deliberations lasting 5 ½ hours, the jury returned a verdict agreeing with our client’s argument. The jury awarded compensatory damages of $8.9 million, which is increased by 9 percent interest from March 27, 2001.
According to Richard, “This is a satisfying victory for our client, but the most significant aspect of this case was our ability to hold the parent company liable, despite the fact that it was not a signatory to the sale agreement enacted through an assetless special purpose acquisition vehicle. That was the crux.”
U.S. District Judge Gerald E. Lynch is expected to enter judgment approximately a month after the verdict was rendered. Our client is seeking specific performance, asking the Court to order Bay Industries to purchase Soundcoat at the agreed upon price of $11.7 million, plus appropriate damages. In the alternative, Recticel seeks judgment in the amount of the damages awarded.
Recticel, which is best known for it’s more than 200-year history as a munitions and arms manufacturer, is a new client to the Firm. New York partners Anthony Williams and Richard De Palma lead our representation of Recticel.
The trial team that worked with Richard included New York associates Brian Belowich, Kathryn Ryan, and Lindsay Bush.