Legal Issues and Printing/Direct Mail and Lawsuits and Business Services and Law

Inventor files suit against local printing business

November 18, 2010

The former owner of packaging firm Discom Technologies has filed suit against buyer Harding Poorman Group Inc. and subsidiary SPG Graphics, alleging he was shorted a percentage of Discom sales he was to have collected after the sale.

Jeffrey S. Combs also alleges in the suit brought last month in Marion Superior Court that the Indianapolis graphics and publishing company later dissolved Discom, rendering his remaining 20-percent stake worthless.

Combs devised and patented a method to bind compact discs and their sleeves into printed materials. The vinyl compact disc sleeve can run through binding equipment with the disc enclosed, allowing the disc and sleeve to be placed anywhere in a book. According to the suit, he sold 80 percent of Discom to SPG Graphics in July 2005, receiving an initial payment of $1.6 million.

Combs said the sales agreement further required SPG to pay him quarterly “override” payments—essentially a commission—for five years, based on 7 percent of Discom’s sales.

He alleges SPG failed to disclose all of the sales that involved Discom’s patented products, upon which his quarterly commission was based.

“Combs recently learned that SPG failed to credit Discom for a number of substantial sales,” states his suit.

The entrepreneur alleges that after his 2007 termination he attempted to sell his remaining 20-percent interest in Discom to Harding Poorman as the sales agreement stipulated, but did not receive a response. He alleges that SPG told employees that SPG bought the remaining 20 percent, and that it in 2009 “made the unilateral decision to dissolve Discom and liquidate its assets.”

Discom is still listed on Harding Poorman’s Web site as one its business units.

Harding Poorman principal David A. Harding, who was also named as a defendant, denies the allegations.

“We don’t think his claims have any merit and we’re defending those claims in court. Other than that we have no comment,” said Harding.

Among Combs’ allegations are breach of contract, breach of fiduciary duty, minority member freeze-out and constructive fraud. The suit does not specify a  dollar amount of damages.

Harding Poorman lists annual sales of $24.8 million.

 

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