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locations. Flair Enterprises is one of B&H’s largest customers.
In 1999, Flair Enterprises was purchasing PPG paint products for
use in its body shops. PPG canceled its business with B&H, and
Flair Enterprises was asked by B&H to switch to Dupont paint
products.
Flair Enterprises entered into an agreement (the supply
agreement) with B&H for the purchase of Dupont paint products
instead of PPG products for 5 years, for which change in supply
Flair Enterprises would be compensated $150,000. Dupont financed
the supply agreement as an incentive for Flair Enterprises to
continue using B&H as its paint vendor and to switch to Dupont
paint products. Half of the incentive payment was to be paid at
the time of the contract formation in 1999, and the remaining
half was to be paid in monthly installments of $1,250.
Although the supply agreement does not address the issue,
B&H intended that Flair Enterprises would use the incentive
payment to purchase shop equipment, such as paint booths or
spraying machines, and referred to the supply agreement as a
“shop investment”. Flair Enterprises received a payment of
$75,000 in 1999, which year is not before us, when the supply
agreement was executed, and received 60 monthly installments of
$1,250. The monthly installments of $1,250 received throughout
2000 and until September 2001 were not invested in the business
of Flair Enterprises but were cashed by Mrs. Haney.
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Last modified: November 10, 2007