New Jersey Superior Court is expected to issue a ruling by the end of June in a lawsuit between compounding leader PolyOne Corp. and Cary Compounds LLC, a Dayton, N.J.-based PVC compounder.
If Judge Rosemary Reavey rules in PolyOne's favor and awards it $5 million - the full judgment the firm reportedly is seeking - it would deal Cary Compounds a devastating blow, according to co-owner Ken Cary.
``If [PolyOne] gets the full judgment, it would be very hard for us to survive,'' Cary said in a recent telephone interview. ``As it is, there are things we wanted to do to grow the business, but our credit lines are limited, and the banks won't meet with us until [the trial] is over with.''
PolyOne originally had accused Cary of taking market information, customer lists and at least a dozen compound formulations that belonged to Synergistics Inc., a Mississauga, Ontario-based PVC compounder that PolyOne forerunner Geon Co. acquired in 1997. Cary ended his 23-year Synergistics career in 1995 and founded Cary Compounds four years later, after his noncompete agreement with Synergistics expired. PolyOne also accused Cary of recruiting employees from a Synergistics plant in Farmingdale, N.J.
In March, PolyOne removed many of the claims it had made against Cary from the lawsuit, leaving only claims that he had taken formulations for a pair of PVC compounds, one used in nonmetallic cable lining and one used in appliance wires such as lamp cords.
Cary described the formulations in question as ``basic formulations that everybody and their brother has'' and added that he doesn't know why PolyOne dropped its other claims.
During the trial, Cary said he and his lawyers cited cases in which similar formulations were published in various conference proceedings that were readily available throughout the compounding industry.
PolyOne spokesman Dennis Cocco said his firm ``narrowed down'' its claims after going through the discovery process before the trial, but he added that doing so ``doesn't diminish the seriousness of [PolyOne's] claim.''
``Whether it's one claim or a dozen, we still believe we have a valid case and we'll let the court decide,'' Cocco said.
The six-week trial ended in mid-May. Cary said that in court PolyOne's lawyers indicated the firm was seeking between $3.5 million and $5 million in damages.
Cary added that he's unsure why PolyOne, which lost more than $21 million in the first quarter of 2001, would continue to pursue the lawsuit against his much smaller company. PolyOne's 2000 sales were $3.1 billion, while Cary Compounds' sales were $18 million.
``I think [PolyOne] is just trying to put me out of business,'' Cary said. ``If I was a PolyOne shareholder, I'd want to know why the company was wasting a million or so dollars suing Ken Cary.''
``The issue isn't money,'' PolyOne's Cocco said. ``We have a right to protect our property, and we'll defend that right vigorously.''