ED Magedson – Founder
Office DepotBoca Raton, Select State/Province USA
Office Depot Starboard Value Fund, Officemax Office Depot Hides Whistleblower Lawsuit Liabilities from Starboard Value Fund and Office Max Boca Raton Florida
Is Office Depot disguising
Written by Peter Frost Thursday, 11 July 2013 21:30
Lost in the hoopla of OfficeMax and Office Depot shareholders merger approval was the potential cost of the Whistleblower lawsuit to the new combine of $100m+. Is Max aware or choosing to play deaf?
The case (State of California ex. el David Sherwin vs Office Depot, CV 12-9952 FMO) is known as a Qui Tam action and was filed under the California False Claims Act (CFCA), and unsealed in 2012.
The whistleblower's case centres on a national contract that Office Depot marketed through the U.S. Communities Government Purchasing Alliance (U.S. Communities), which guaranteed participating agencies that they would receive Office Depot's lowest pricing to government entities.
According to the complaint Office Depot knowingly deceived the agencies by charging them higher prices then they were contractually entitled to, as well engaging in a "bait and switch" scheme.
On July 18th, 2013, Office Depot's final hearing is scheduled to have portions of the case dismissed. On April 9th 2013, the court denied Office Depot's previous motions to have the case dismissed. A Depot loss at the hearing on the 18th opens the way to a lengthy, costly, and embarrassing jury trail that could end up costing the combined shareholders of OfficeMax and Office Depot hundreds of millions of dollars.
Currently, the City of Los Angeles and 21 other agencies are leading the legal challenge to Office Depot in a case that represents a total of 2,000 California agencies allegedly victimized by Office Depot's fraudulent overcharging schemes. The estimated amounts of potential damages range from $300-500 million, as actual overcharges are tripled and heavy penalties would be levied should Office Depot lose.
The big question is how aware are Max shareholders of this potential financial disaster looming over the soon to be merged company?
State of California ex. rel David Sherwin v. Office Depot, Inc.
This report was posted on Ripoff Report on 07/26/2013 04:36 AM and is a permanent record located here: http://www.ripoffreport.com/r/Office-Depot/Boca-Raton-Select-StateProvince/Office-Depot-Starboard-Value-Fund-Officemax-Office-Depot-Hides-Whistleblower-Lawsuit-Lia-1070243. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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