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Brewer brothers file arbitration claim against Balda AG
Former owners of C. Brewer Co. (Anaheim, CA) Chuck Brewer III and his brother Michael Brewer have initiated arbitration claims against Balda AG (Bad Oeynhausen, Germany), reports Germany-based Finance-Magazin. Balda purchased the contract molder, along with HK Plastics (Oceanside, CA), in December 2013.
January 12, 2015
2 Min Read
Former owners of C. Brewer Co. (Anaheim, CA) Chuck Brewer III and his brother Michael Brewer have initiated arbitration claims against Balda AG (Bad Oeynhausen, Germany), reports Germany-based Finance-Magazin. Balda purchased the contract molder, along with HK Plastics (Oceanside, CA), in December 2013. At the time of purchase, Chuck Brewer was named CEO and his brother Michael COO of the subsidiary companies, renamed Balda C. Brewer and Balda Precision. Shortly after news of the litigation surfaced on Jan. 2, Balda announced on Jan. 7 that it was relieving the Brewers of their duties and that their responsibilities would be taken over by existing managers of the Balda Group. At issue is a performance-based earn out, according to the Brewers.
Happier days: From left, Chuck Brewer III, Michael Brewer, and Rolf
Eilers, Managing Director of Balda Medical GmbH & Co. KG.As reported in PlasticsToday in February 2013, Balda AG purchased 100% of the shares of C. Brewer and HK Plastics for $50 million and $15 million, respectively, as part of a strategy to expand its medical molding operations in the United States. As part of the deal, the Brewers say they were promised a $5 million bonus based on achieving certain performance-related goals. The brothers claim that Balda Investments US created conditions that impeded their ability to receive the performance-related earn out, reports Finance-Magazin. The Brewers are asking for the $5 million they claim they are owed plus punitive damages and arbitration costs.
This is not the first time that the purchase of the two U.S. companies has caused Balda some angst, notes Finance-Magazin. Electro, a major Balda shareholder, criticized the acquisition about six months after it was made, reports the online news site. It claimed that more than 75% of the total purchase price for C. Brewer and HK Plastics Engineering related to "goodwill and intangible assets" and it demanded a review of the transaction.
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