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AdvoCare Weight Loss Supplement Maker
AdvoCare Wins $14.3 Million Federal Verdict
in Breach of Contract, Fraud Case PRESS RELEASE - LAWSUITS
March 2, 2006
Daniel Sheehan & Associates -
DALLAS – LAWFUEL - The Law News Network - A federal jury in Dallas has
awarded a verdict worth more that $14.3 million to Carrollton,
Texas-based AdvoCare International L.P. following a two-week trial
against a former company consultant and a manufacturer that produced
weight-loss products for AdvoCare.
AdvoCare was represented by attorney Daniel Sheehan of Dallas’
Daniel Sheehan & Associates in the trial before Judge Barefoot Sanders
in the U.S. District Court for the Northern District of Texas.
During trial, jurors learned about Richard Scheckenbach, a nutritionist
and former AdvoCare consultant who was responsible for formulating
products to be sold by the company. As a consultant, he agreed not to
receive payment from suppliers or manufacturers in connection with
AdvoCare products he developed.
However, evidence in the case showed that Mr. Scheckenbach orchestrated
a scheme in which he created companies to sell the raw materials needed
to make AdvoCare’s products. He then sold these materials at inflated
prices to AdvoCare’s manufacturer, California-based Horizon Laboratories
Inc.
The jury found that Mr. Scheckenbach committed fraud and breached his
fiduciary duty to AdvoCare. He was ordered to pay $9 million in actual
damages and $2 million in exemplary damages.
“AdvoCare trusted Mr. Scheckenbach, both with the products he
developed and in the way he handled his business,” says Mr. Sheehan,
lead counsel for AdvoCare. “It is a shame he betrayed that trust and
used his close relationship with the company for his personal gain.”
Additionally, the jury found that Horizon Laboratories breached its
contract with AdvoCare by failing to maintain products liability
insurance for the
ephedra
weight loss supplement products it manufactured for the company.
AdvoCare has been named in 11 ephedra-related lawsuits. The jury awarded
AdvoCare damages of almost $3.4 million from Horizon Laboratories to
cover its costs from the ephedra litigation.
The eight-woman and three-man jury returned their verdict on Feb. 15,
2006. The verdict is still awaiting entry into judgment by Judge
Sanders.
Daniel Sheehan & Associates specializes in business litigation and legal
malpractice cases. Mr. Sheehan is board certified in civil trial law,
and handles trials and appeals in state and federal courts, including
the Supreme Court of Texas and the U.S. Supreme Court
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