Bank of China appears ready to pay $300,000 to Gucci America Inc. and Compagnie Financière Richemont brands Chloé and Alfred Dunhill to end their inquest into its handling of a counterfeiter’s financial records.
This story first appeared in the January 7, 2010 issue of WWD. Subscribe Today.
Lawyers for the luxury firms and the bank submitted a proposed settlement order to U.S. District Court Judge John Koeltl in Manhattan Wednesday. According to court documents, the bank would pay the $300,000 settlement in exchange for an agreement that keeps it out of any future judgments or collection efforts stemming from a 2007 trademark suit against Kelvin Cho, a native of Malaysia who sold knockoff goods online and received payment through a Bank of China account.
In March 2008, Gucci and the Richemont brands won a $4.3 million judgment against Cho. After the judgment, the firms said Cho still owed $4 million and accused Bank of China of allowing him to drain his account despite a court ordered freeze. Later that year, the state-owned bank agreed to release Cho’s records and pay $190,952, but the brands said it failed to abide by the deal.
In May 2009 the luxury firms sought a court order compelling the state-owned bank to turn over information related to Cho’s account. Bank of China countered with a motion to quash in July. The luxury firms would drop their request for a subpoena as part of the terms set forth in the deal.
The settlement, which according to court records includes additional confidential terms, still requires court approval. Attorneys for Bank of China had no comment on the agreement Wednesday. Lawyers representing Gucci, Chloé and Alfred Dunhill could not be reached for comment.