LAWSUITS NEWS & LEGAL INFORMATION
Imation Corp.
After a six-year legal battle, Jazz Photo Corp., a reloader of disposable cameras, entered into a $25 million settlement with data storage giant Imation Corp. for allegedly faulty camera film. In a case being tried before Hon. Jose Linares of the United States District Court for the District of New Jersey, the settlement was approved by Hon. Morris Stern of the United States Bankruptcy Court for the District of New Jersey under which Jazz was operating as a debtor-in-possession.
Jazz and its Hong Kong affiliate asserted claims against Imation and two of its foreign subsidiaries, arising from Imation's sale to Jazz, in 1997-1998, of approximately 10 million rolls of HP 400 film. When the film was developed, it produced prints that were marred by severe magenta discoloration. Complaints from consumers who purchased Jazz cameras loaded with the HP 400 caused Wal-Mart and other retailers to pull the cameras from their shelves.
In its lawsuit, Jazz claimed that Imation committed fraud when it sold the film because Imation knew of the magenta discoloration problems and failed to reveal them, and because Imation affirmatively represented to Jazz that the HP 400 film was of high quality. Jazz claimed additional fraud because, after the first rolls of film were delivered, Imation falsely denied - and failed to reveal - that other Imation customers around the world were experiencing similar problems with HP 400 film. Jazz also claimed that Imation breached the implied covenant of good faith and fair dealing that is implied into every contract in New Jersey and that Imation violated the New Jersey RICO statute.
The parties agreed to the settlement. Imation will pay $20,950,000 and three insurance companies will pay the balance.
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Jazz and its Hong Kong affiliate asserted claims against Imation and two of its foreign subsidiaries, arising from Imation's sale to Jazz, in 1997-1998, of approximately 10 million rolls of HP 400 film. When the film was developed, it produced prints that were marred by severe magenta discoloration. Complaints from consumers who purchased Jazz cameras loaded with the HP 400 caused Wal-Mart and other retailers to pull the cameras from their shelves.
In its lawsuit, Jazz claimed that Imation committed fraud when it sold the film because Imation knew of the magenta discoloration problems and failed to reveal them, and because Imation affirmatively represented to Jazz that the HP 400 film was of high quality. Jazz claimed additional fraud because, after the first rolls of film were delivered, Imation falsely denied - and failed to reveal - that other Imation customers around the world were experiencing similar problems with HP 400 film. Jazz also claimed that Imation breached the implied covenant of good faith and fair dealing that is implied into every contract in New Jersey and that Imation violated the New Jersey RICO statute.
The parties agreed to the settlement. Imation will pay $20,950,000 and three insurance companies will pay the balance.
[EMAIL LAWYER]
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