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$3.9M Breach of Contract Lawsuit Settlement


This is a settlement for the Unfair Business Practices lawsuit.

Los Angeles, CA: A $3,907,000 settlement has been reached in an unfair business practices lawsuit brought against Wyndham, a time-share company.

The settlement, which involves a $3,192,000 award for fraud and a $715,000 for breach of contract, among other things, was brought against Wyndam by Casablanca Express. Over a 19 year period, Casablanca Express and Wyndham built a business relationship whereby Casablanca helped Wyndham market and sell its timeshare products. At Wyndham' request, Casablanca worked almost exclusively for Wyndham. As part of the contract between the parties, Wyndham agreed to give Casablanca a "wind-down"severance agreement, whereby Wyndham would pay Casablanca for three years after terminating its relationship with Casablanca so as to allow Casablanca time to rebuild its business with other clients. Wyndham also promised to give Casablanca the right of first refusal on all travel certificates used by Wyndham.

In October 2008, claiming it needed help during the recession, Wyndham requested that Casablanca waive the wind-down clause in exchange for promises of a long-term, growing and exclusive business relationship going forward. At the time Wyndham asked for the deletion of the wind-down clause Wyndham had secretly decided to cease doing business with Casablanca. Shortly after Casablanca agreed to delete the wind-down provision of the agreement (and give up other financial entitlements) in exchange for the promise of a long-term, growing and exclusive business relationship going forward, Wyndham abruptly ceased doing business with Casablanca.

Loss of the value of the wind-down clause was valued at $6 million, and, lost profits on the breach of the right of first refusal provision of the contract in the amount of approximately $1 million.

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Published on Jan-29-13


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