Arnold & Clifford Attorneys Win Preliminary Injunction to Enforce Supply Agreement

An Arnold & Clifford trial team consisting of James E. Arnold and Michael L. Dillard, Jr. won a temporary restraining order followed weeks later by a preliminary injunction worth hundreds of thousands of dollars in revenue to their client. The preliminary injunction hearing in Franklin County, Ohio was the culmination of just under a month of fast-paced litigation, involving several hearings, multiple depositions, written discovery, and briefing.

The client was a well-known Columbus eatery famous for treating its customers to original recipe bagels and bagel products for over fifty years. Operating on the eastside of Columbus since the late 1960’s, the client had over thirty employees helping with the retail and wholesale sides of the business. As part of its wholesale business, it had a supply agreement with the defendant who back in 2016 had agreed to get his supply from the client for ten years in exchange for the defendant being able to use the client’s well-known family name to run his restaurants. Without warning, in early October, the client was notified, that defendant, the client’s largest wholesale customer, intended to unilaterally breach the 10-year supply agreement. The defendants claimed that they had perpetrated an asset sale and that Ohio law permitted them to avoid successor liability in asset sales as a matter of course.

The client turned to Arnold & Clifford to prevent the breach and save the third-generation family-owned company from going out of business. Arnold & Clifford sued the defendant and four of his cohorts for injunctive relief, to stop the breach and permit the client to continue to operate its business. Arnold & Clifford successfully argued that successor liability always applies to asset purchase situations when the seller purported to sell the assets to himself as buyer.

“It is always gratifying to win on behalf of a client, especially one like this one, where the win means we save a fifty-five year old family-owned company from going out of business and save over thirty people from losing their jobs in the process.” said Mr. Arnold.