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California Jury Vindicates Royal Marketing and Slams Chinese Government Owned China Lucky Film Corporation With $3 Million Dollar Verdict

Posted on: Tuesday, 2 June 2009, 10:00 CDT

LOS ANGELES, June 2 /PRNewswire/ -- BFK Inc. dba Royal Marketing today announced that a California jury returned a $3 million dollar verdict in its favor and against the China Lucky Film Corporation ("China Lucky") in broad and sweeping finding of wrongdoing. According to evidence introduced at the trial, China Lucky (www.luckyfilm.com.cn) touts itself as "a trans regional and conglomerate modern company in the field of imaging and information recording industrial sector of China in terms of largest scale, strongest technical force, varieties of product and market share." China Lucky claims to be one of 189 large size China owned enterprises financed by the State Assets Administration and that it engages in the manufacture of photo-imaging products such a film, digital and analog paper that are manufactured for civilian as well as military use.

On March 27, 2009 a California jury found China Lucky liable for negligent misrepresentation, breach of warranty and breach of the implied covenant of good faith and fair dealing arising out of its business dealings with Royal Marketing, a Los Angeles based photo-imaging distribution company with worldwide distribution.

Royal Marketing introduced at trial, a very detailed written agreement signed by it and China Lucky. The Agreement obligated China Lucky to sell very specific products to Royal Marketing. Royal Marketing argued that China Lucky refused to sell certain products contained in the agreement and that the products that China Lucky did sell were of inferior quality. For instance, a number of witnesses, including experts in the photo-imaging industry, testified that the quality problems stemmed from the fact that China Lucky photo papers were not manufactured to American photo-imaging companies' standards. American photo-imaging companies all use standardized "chemistry" in the processing of film to pictures. Several witnesses at the trial testified that China Lucky's technician told them that the China Lucky paper required the photo laboratories to add varying amounts of other chemicals - including ammonia. Witnesses called by Royal Marketing, including several of its customers, all complained about the China Lucky photo paper's poor quality.

After the trial concluded, Royal's Vice President, Farshid Ourian noted that "When one of our customers was told by a China Lucky technician who had visited his lab, that he was supposed to add ammonia, I thought he was going to call the police to have the guy physically removed. All of our clients were utterly shocked at what they were being told by the China Luck representative."

After the jury announced its verdict, Royal Marketing's President stated: "We are ecstatic. We always knew that when a jury heard the truth of what transpired and how China Lucky behaved, how they treated us, and the facts surrounding the product they sold us, it would make the findings it did."

Although Royal Marketing and China Lucky had entered into a long term distribution deal, almost from the beginning, China Lucky started giving Royal Marketing problems. Bob Bakhshi testified that first China Lucky refused to sell them one of the main products set forth in the written agreement. The jury was told that Royal Marketing found out later, after having purchased and re-sold in the United States hundreds of thousands of dollars of the China Lucky photo paper that the paper was not manufactured to U.S. standards and was of poor quality. A China Lucky consultant actually admitted at the trial that the China Lucky paper was not suitable for the U.S. Market. "That admission was astonishing" noted Bakhshi, after the jury returned its verdict.

Royal Marketing had been in business 25 years when it started purchasing photo-imaging product from China Lucky. Prior to that, Royal had been one of Konica Minolta's largest and most successful independent distributors of its photo imaging products - catering the cruise line industry among others. "Our deal with China Lucky killed our business." Said Bakhshi. "We have never been able to recoup the losses we sustained to our goodwill nor were we able to locate any alternate suppliers. The jury made it clear that China Lucky harmed us, and that they must reimburse us for the substantial and severe damages they caused. Incredibly, and after everything China Lucky put us through, they refused so far, to pay any sums ordered by the jury."

Jury verdict or not, China Lucky is moving on in the United States and apparently is still attempting doing business with other American companies. To those other American companies willing to do business with the Chinese government backed conglomerate, Bakhshi states: "Given what happened to us and their refusal so far to pay the judgment ordered by the court, all I can say is, good luck."

SOURCE Royal Marketing

Source: PR Newswire

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