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Nukote Seeks $217 Million In Suit Against Office Depot

16 Sep, 2009

Nukote Seeks $217 Million In Suit Against Office Depot

Plano, TX (September 2009) - Nukote International filed suit against Office Depot in the U.S. Bankruptcy Court in Nashville, Tennessee. According to the complaint, Nukote is seeking $217 million in damages for Office Depot's “willful, malicious and fraudulent misrepresentations, breaches of contract, and violations of the Uniform Commercial Code.”

The complaint also alleges that the defendant “was secretly negotiating with the Debtor's (Nukote) competitor to replace the Debtor as its primary vendor for the same or similar products.” When Office Depot “abruptly and without notice breached its agreements” Nukote claims it was unable to survive without filing for protection under Chapter 11 of the Bankruptcy Act. That filing took place on June 3, 2009. It was the second such action after filing under Chapter 11 in 1998.

A global supplier, Office Depot is one of the world's largest office discount superstores, operating nearly 1,200 office supply stores throughout the U.S. and Canada. In fiscal 2008, the Boca Raton, Florida-based company sold $14.5 billion in products and services. Its International Division is active in 47 countries in the U.K., Europe, Central America and Asia, “either through wholly-owned entities, majority-owned entities or other ventures covering 38 countries, and through alliances in an additional nine countries.”

In addition to numerous office imaging products, Nukote is a leading producer of remanufactured ink jet and toner cartridges with facilities in Franklin, TN and Monterrey, Mexico.

The relationship between Office Depot and Nukote, which began in 1989, lasted 20 years. During that period, the business was “mutually productive” reaching more than $85 million in annual sales of imaging products to Office Depot by 2007. Nukote's performance during that period “earned multiple honors” according to the complaint, which asserts that it was Office Depot's financial difficulties that forced it to “squeeze cash from the Debtor through a series of fraudulent misrepresentations and omissions.” It eventually breached its contracts with Nukote in May 2009, according to the complaint.
Office Depot has denied the allegations, stating that Nukote ceased shipments in April 2009, forcing it to search for a competitive vendor. In a news release it vowed to vigorously defend against Nukote's allegations and monetary demands, adding that it also intends to seek reimbursement for amounts it claims are currently owed by Nukote.

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