WILMINGTON, DEL. - On April 17, Low & Bonar filed a lawsuit for more than $7 million against Rotonics Manufacturing Inc. in Superior Court, in Wilmington for breach of contract, said Low & Bonar spokesman Ron More. ``The penalties against RMI are for not living up to obligations under the agreement that was made,'' More said. Rotonics officials were not available for comment.
Low & Bonar subsidiary Bonar Plastics Inc. of Newnan, Ga., had been working toward acquiring Gardena, Calif.-based RMI when a second party expressed interest in RMI. RMI would not disclose who the second company is or if it is a rotational molding firm.
Jim Heilig, Low & Bonar chief executive officer, cited penalties, damages and compensation as part of the legal action. Lawyers at Coudert Bros. in New York confirmed they filed the suit.
However, neither Low & Bonar executives nor its lawyers would comment on the specifics of the lawsuit.
More also said RMI has terminated all discussions with Bonar involving its acquisition.
Low & Bonar is based in Dundee, Scotland.
When talks between Bonar and RMI were put on hold, RMI said Bonar did not perform up to standards set in the companies' agreement in principle.
Bonar's agreed acquisition price of $2.34 per share placed the value of RMI at about $33 million. The new bidder's offer is about 15 percent more, according to Heilig.