Subscribe
Jobs
Cars
Real Estate
Apts
Classifieds
Shop
The owner of local sewing companies that exclusively provided services to Vera Bradley Designs Inc. has sued the handbag and accessories manufacturer for unspecified damages, alleging breach of contract.
Vera Bradley announced in March that it would integrate vertically, bringing much of its sewing in-house.
That decision put hundreds of local sewers out of work, at least temporarily. According to a lawsuit filed this week in the Allen Superior Court, it also left Robert Hinty and his companies – Phoenix Sewing Inc., Summit Production Systems LLC and Mercury Manufacturing LLC – to repay a $3 million loan taken out less than three years earlier to expand business with the handbag maker.
The lawsuit tells of a longtime business relationship gone sour between Hinty and Vera Bradley.
Hinty and Joseph Bockerstette borrowed $150,000 from Vera Bradley in 1994 to form Phoenix Sewing Inc. to supply Vera Bradley with sewing services. Vera Bradley prohibited Phoenix from doing business with the handbag makers’ competitors without board approval, the lawsuit said.
Hinty joined Vera Bradley as vice president of operations in 2000. He stayed until 2003, when he and Bockerstette formed another company, Summit Production Systems, again to exclusively supply Vera Bradley and help meet growing demand.
Hinty bought out Bockerstette’s interests in November 2005, making him sole owner of Phoenix and Summit. Tower Bank had initial reservations about lending Hinty and his companies the $3 million needed to buy out Bockerstette’s interests, the lawsuit alleges, so Barbara Baekgaard, Vera Bradley co-founder and president, sent the bank a letter calling Hinty “a trusted friend” and business associate.
“Phoenix Sewing is a valuable component of Vera Bradley’s success and we are committed to continuing our working and personal relationship with Bob and his company,” said a copy of the letter included in the lawsuit.
Hinty was able to secure the loan, and in March 2006 he founded Mercury Manufacturing, again as an exclusive supplier for Vera Bradley.
By January, the three companies’ staffing had fallen to 537 employees. Hinty asked Vera Bradley about closing one of the plants, the lawsuit said, and for the first time the handbag manufacturer mentioned its vertical integration plans.
According to the lawsuit, Crowe Chizek and Co. calculated the buyout value of Hinty’s companies at more than $10.5 million, but the company declined to buy out Hinty and instead terminated its business relationships.
Hinty’s lawsuit alleges Vera Bradley added insult to injury by setting up a preferred application program for Hinty’s employees to work for the handbag maker and proceeded to “loot” his companies.
Hinty believes Vera Bradley was trying to force him to accept a buyout of less than what he is entitled or to force his companies into liquidation to buy their assets at fire-sale prices, the lawsuit said.
A telephone listing for Hinty could not be found. Vera Bradley spokeswoman Melissa Cordial declined to comment on the lawsuit, citing a company policy of not commenting on legal matters.
aturner@jg.net
