LOS ANGELES — May Department Stores Co. is the target of a $2.1 million lawsuit alleging fraudulent and unfair business practices by one of its vendors, which also seeks $100 million in disgorgement, or the surrender of profits as...
LOS ANGELES — May Department Stores Co. is the target of a $2.1 million lawsuit alleging fraudulent and unfair business practices by one of its vendors, which also seeks $100 million in disgorgement, or the surrender of profits as compensation.
In the suit, filed here in federal court last month, Cheong Tai International Holdings Ltd. is seeking a $1.2 million payment on goods it manufactured and shipped in June and July to U.S. May stores that were preapproved by May International employees at Cheong’s factories. A declaration filed Aug. 5 by Cheong Tai managing director Irene Tang states the vendor received a re-order e-mail from May International noting one of the styles for the ordered goods had “sold extremely well.”
Cheong is also seeking the return of $900,000 that it paid in chargebacks to the $13.5 billion retailer in April. At the next level, Cheong is looking for injunctive relief against May and wants a court order to pay $100 million to vendors who’ve had unfair dealings with May.
A $100 million garment manufacturer, Cheong Tai has had a 20-year relationship with May, according to the vendor’s attorney, Andrew Jablon from Resch Polster Alpert & Berger LLP.
“We believe because of this history, we had to take immediate action,” he said. A hearing is set for Aug. 26 on Cheong’s application for a writ of attachment worth $1.2 million.
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