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Pet product manufacturer sues former controller over allegations

Computer fraud, misappropriation of trade secrets, breach of fiduciary duty and breach of contract: these are all matters that can be categorized as tortious injuries in a civil lawsuit. And each of these accusations appears in a recent lawsuit filed by a local manufacturer of pet products.

The Los Angeles-based company, All American Pet Co. Inc, manufactures all-natural food and care items for dogs, and the former controller for the business has accused the president and CEO of misuse of investor funds and intentionally overestimating sales and production numbers. For its part, All American Pet says the former employee is disgruntled, and that he made "libelous statements and meritless accusations" about the company's president and chief executive.

In particular, the dispute centers on the sales and production estimates for a brand of power bars made for dogs. A statement released in September 2012 by the company estimated the power bars would be stocked in 60,000 stores by the end of the year. However, the former controller claimed that even an earlier estimate of 40,000 stores "was grossly overstated and totally unachievable."

According to one news report, by late January, none of the five major retailers listed on the company website had yet started selling the power bar product, which is called NutraBar. However, Walmart, which was listed on the website, did indicate that beginning in February, roughly 1,000 Walmart stores would begin selling NutraBars.

The former employee also claims that over $1 million were improperly transferred to another corporation under the control of the All American Pet chief executive. The former controller's employment was terminated in early January, and All American Pet has since filed its lawsuit in Los Angeles.

Business owners with similar concerns need to be aware of their options for mitigating risk, and a business tort lawsuit is one way for a business to protect its reputation and its profits.

Source: Pet Product News, "All American Pet Sues Ex-Controller Who Leveled Allegations," Ken Niedziela, Feb. 5, 2013

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