Supervalu, Bad Business, Questionable Diversions, $16 Million Judgment
SUPERVALU
THE JURY SPEAKS
$16 MILLION AGAINST SUPERVALU IN THE JONNY JOHNSON, RICHMOND, VIRGINIA CIVIL SUIT
As we reported last week, Jonathan Johnson, an African American businessman from Richmond Virginia, took on the behemoth Supervalu in a Civil Action seeking damages for breach of contract.
For approximately 12 years Johnson’s grocery business had entered into a business relationship with Richfood, Inc and Supervalu. Supervalu and Richfood extended credit, provided warehousing services, accounting and other services typical in the grocery business.
The agreements between the parties fell apart when it was discovered by Johnson that after reaching a contract “obligation to provide assistance.. With opportunities to grow” the business.
Johnson discovered that his companies were being subject to questionable business practices, such as being shorted on product deliveries, failing to receive timely credits and rebates and improper charges. Johnson also discovered that Supervalu, without his knowledge, was in discussions with his store landlord to secure sites for Supervalu’s “Save-A-Lot” chain of retail stores, a competitor to Johnson’s business.
Johnson had also discovered through inquiries with manufacturers, that without his knowledge his companies unknowingly had been involved in a series of transactions by which Supervalu/Richfood allegedly collected manufacturers rebates on products, but not actually purchased by Supervalu/Richfood through Johnson’s company stores.
These fraudulent DIVERTING transactions benefited Supervalu/Richfood financially, while siphoning substantial revenues from Johnson’s companies.
The four man - three woman jury awarded Johnson a $16 million judgment, a decision upholding the numerous allegations that the nation’s third largest grocery chain, Supervalu, forced him out of business.
Lawyers for Supervalu immediately told Judge Margaret P. Spencer that they will appeal the decision and renew motions to throw out Johnson’s evidence in the case.
Johnson and his legal team argued that Supervalu defrauded Johnson by singling him out as a troublemaker, while it had extended high-interest loans and supplied contracts worth millions.
Johnson stores went out of business in April 2004 ending a 15 year business operation in an inner-city community in the State of Virginia.
As we had reported earlier, Johnson witness Susan Rhyberg, a former technical employee for Supervalu had testified for Johnson. Supervalu Senior executives took the witness stand claiming that Rhydberg was not in meetings or even known. As rebuttal, Rhyberg returned to the witness stand this past week and provided testimony, e-mails and other information showing her employ and participation in the Supervalu business meetings disputed.
Was this a typical “BUST-OUT” takeover of a business by Supervalu, or was Johnson just a victim of aggressive business practices by the behemoth food giant.
Like the scene in the movie “Goodfellas”, the bar owner goes to the boss and asks for him to take the goons off his back. He agrees, and then takes over the business, keeping it afloat, using the bars contacts and credit with suppliers, then upon delivery moving the products out the back door, selling to other stores for cash. No payments made by the bar to the suppliers, then the bar is closed. No credit, no suppliers, no business. The next scene is the torching of the bar.
In this scenario, Johnson’s business was forced to close as the result of Supervalu’s business practices, high interest loans, rebate diversions and product diversion. So after 15 years of business Johnson lost it all. Supervalu entered into the community and began new grocery markets in the region.
What a take over!!!
Congratulations to Jonny Johnson for his taking on the goliath Supervalu. Like “David” beating the giant by the small guy is not only a win for Johnson, but a win for the community he served for so many years.
What do you think? Is a Pattern Developing in the Coupon and Rebate Industries?
Have a Comment, send it in...
We Report, You Report...
THE JURY SPEAKS
$16 MILLION AGAINST SUPERVALU IN THE JONNY JOHNSON, RICHMOND, VIRGINIA CIVIL SUIT
As we reported last week, Jonathan Johnson, an African American businessman from Richmond Virginia, took on the behemoth Supervalu in a Civil Action seeking damages for breach of contract.
For approximately 12 years Johnson’s grocery business had entered into a business relationship with Richfood, Inc and Supervalu. Supervalu and Richfood extended credit, provided warehousing services, accounting and other services typical in the grocery business.
The agreements between the parties fell apart when it was discovered by Johnson that after reaching a contract “obligation to provide assistance.. With opportunities to grow” the business.
Johnson discovered that his companies were being subject to questionable business practices, such as being shorted on product deliveries, failing to receive timely credits and rebates and improper charges. Johnson also discovered that Supervalu, without his knowledge, was in discussions with his store landlord to secure sites for Supervalu’s “Save-A-Lot” chain of retail stores, a competitor to Johnson’s business.
Johnson had also discovered through inquiries with manufacturers, that without his knowledge his companies unknowingly had been involved in a series of transactions by which Supervalu/Richfood allegedly collected manufacturers rebates on products, but not actually purchased by Supervalu/Richfood through Johnson’s company stores.
These fraudulent DIVERTING transactions benefited Supervalu/Richfood financially, while siphoning substantial revenues from Johnson’s companies.
The four man - three woman jury awarded Johnson a $16 million judgment, a decision upholding the numerous allegations that the nation’s third largest grocery chain, Supervalu, forced him out of business.
Lawyers for Supervalu immediately told Judge Margaret P. Spencer that they will appeal the decision and renew motions to throw out Johnson’s evidence in the case.
Johnson and his legal team argued that Supervalu defrauded Johnson by singling him out as a troublemaker, while it had extended high-interest loans and supplied contracts worth millions.
Johnson stores went out of business in April 2004 ending a 15 year business operation in an inner-city community in the State of Virginia.
As we had reported earlier, Johnson witness Susan Rhyberg, a former technical employee for Supervalu had testified for Johnson. Supervalu Senior executives took the witness stand claiming that Rhydberg was not in meetings or even known. As rebuttal, Rhyberg returned to the witness stand this past week and provided testimony, e-mails and other information showing her employ and participation in the Supervalu business meetings disputed.
Was this a typical “BUST-OUT” takeover of a business by Supervalu, or was Johnson just a victim of aggressive business practices by the behemoth food giant.
Like the scene in the movie “Goodfellas”, the bar owner goes to the boss and asks for him to take the goons off his back. He agrees, and then takes over the business, keeping it afloat, using the bars contacts and credit with suppliers, then upon delivery moving the products out the back door, selling to other stores for cash. No payments made by the bar to the suppliers, then the bar is closed. No credit, no suppliers, no business. The next scene is the torching of the bar.
In this scenario, Johnson’s business was forced to close as the result of Supervalu’s business practices, high interest loans, rebate diversions and product diversion. So after 15 years of business Johnson lost it all. Supervalu entered into the community and began new grocery markets in the region.
What a take over!!!
Congratulations to Jonny Johnson for his taking on the goliath Supervalu. Like “David” beating the giant by the small guy is not only a win for Johnson, but a win for the community he served for so many years.
What do you think? Is a Pattern Developing in the Coupon and Rebate Industries?
Are our nations Manufacturers bearing the brunt of a deceptive industry?
Have a Comment, send it in...
We Report, You Report...
Labels: 2007, Coupon Fraud, gangs, IOS, Supervalu
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