Sales Chief Sticks to Guns Against Mel Redman

Chinese manufacturer Sales Chief Ent. (Hong Kong) Co. Ltd. continues to cite Bentonville businessman Mel Redman’s business failures and failure to pay for goods as reasons why a federal judge should dismiss a $20 million lawsuit filed by Redman on behalf of his company, Redman & Associates.

The original $20 million lawsuit was filed in September, after R&A alleged Sales Chief changed contract terms and improperly interfered with the company’s business contracts and relationships, resulting in a financial loss that ultimately led to layoffs and siginficant financial loss for the company.

Sales Chief — through its attorneys David Lackowitz of Moses & Singer LLP in New York and Shannon Fant and Vincent Chadwick with Bassett Law Firm in Fayetteville — entered its response Feb. 13 to the original lawsuit. In the response, the attorneys argued the lawsuit should be dismissed “for failure to state a claim.”

But in the amended suit that followed, it was revealed that on Sept. 15, just 10 days after the original lawsuit was filed, Anne Marie Kehoe, vice president of toys at Wal-Mart Stores Inc., notified Redman that the retailer was canceling a signed purchase commitment with his company, a contract valued at more than $70 million.

In the latest response filed Friday in the U.S. District Court for the Western District of Arkansas in Fayetteville, attorneys for the manufacturer claim that Redman’s amended complaint should still be thrown out “for failure to state a claim.”

Friday’s filing is available at this link.

“Confronted with failed business, millions of dollars in debt and inevitable adverse publicity, [Redman & Associates] and its Chief Executive Officer Mel Redman, a businessman with a rather remarkable history of failed businesses who has only recently emerged from personal bankruptcy, try to blame an innocent third-party for [Redman & Associates’] collapse,” the attorneys wrote.

Reached Friday afternoon by the Business Journal for a response, Redman’s attorney, Fayetteville lawyer Mark Henry, offered the following statement:

“Sales Chief continues to perpetuate a story of failed businesses by Mel Redman. This is a false claim. Mr. Redman formerly worked with Doctor’s Community Healthcare Corporation (DCHC), which filed for bankruptcy thirteen years ago, in November of 2002. This was not Mr. Redman’s company, but a corporation that was privately held and run by a Board of Directors. Redman’s robust merchandising experience includes 25 successful years with Walmart, including setting up and running the Canadian division of the world’s largest corporation, followed by twenty-plus successful years in his own marketing consultant services, Redman & Associates.”

Sales Chief, according to the filing on Friday, also continues to claim that R&A fell significantly behind on payment of goods. Henry disagreed with that assertion as well.

“Redman & Associates had enjoyed a trusting business relationship with Sales Chief since 2009. In 2013, following the announcement made to onshore manufacturing, Sales Chief deliberately demanded an unforeseen up-front payment at a critical time in the flow of goods for holiday. By holding merchandise hostage, the company was able to derail the efforts of Redman & Associates to create US jobs and US-made products.”

Henry said Redman now has a little more than two weeks to file a response.