Small Business Man Battles Corporate Greed, Deceit and Wins

After selling his Orange County appliance business to a large Texas corporation, small-businessman Ray Harmon soon discovered that the corporation had no intention of paying nearly a million dollars that was still due on the purchase price. Mr. Harmon decided to take on the corporation, BAS Appliance Gallery, a subsidiary of Champ Industries, based in Houston, Texas, and filed suit in Orange County Superior Court in May 2001. Harmon knew that the case would not be easy and that he was fighting a foe with much greater resources than he had, but he felt corporate greed and deceit needed to be fought against. After over two years of difficult and exhausting litigation, Harmon finally had his day in court and was awarded nearly $1 million by Judge James Brooks of the Orange County Superior Court.

Harmon and his attorneys, Callahan & Blaine of Santa Ana, California, proved that BAS had plotted to obtain Harmon's appliance business by paying only the down payment, and then skipping out of the remaining million dollars due on the purchase price through the use of deceptive accounting practices and manipulation of the contract language. Harmon's expert established that BAS had misstated categories of income, expenses, and capital, and had unnecessarily increased inventory on hand in order to limit the amount of cash in the corporation's coffers. Through a detailed review of the corporation's accounting records, it was proven that not only had BAS not lost money, it had made significant profits.

Another ploy which Harmon was forced to attack was BAS's claim that it did not have to pay Mr. Harmon under their contract because it was in a default position with a senior lender. Based on the testimony of Harmon's expert, the court held that if BAS was in technical default with its lender, that default was "self-inflicted" for the improper purpose of avoiding payment to Mr. Harmon. BAS was ordered by the court to pay nearly $1 million to Harmon.

The decision to engage in a court battle with the much larger BAS Appliance Gallery turned out to be an expensive and stressful decision for Mr. Harmon, but he feels he dealt a blow against the kind of corporate greed and deceit which has been too prevalent in the business world.

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