SE Texas Record

Thursday, December 5, 2019

Man says he was cut out of business deal

By Annie Cosby | Nov 26, 2014

A Jefferson County man is suing over claims he was cut out of a lucrative business deal by potential investors.

Jim and Donna Wade and Hollywood Hits Inc. filed a lawsuit Oct. 1 in Jefferson County District Court against Sid and Foster McDonald, Tony Cook, Kenneth Broussard, CBX Manufacturing, Cold Box Press, Climate Controlled Containers Inc., now known as KBCCC Holdings Inc., and CBX Holding, citing fraud.

According to the complaint, the Wades had owned and operated Southeast Texas Portable Moving Storage, doing business as PODS, for several years when they met with Climate Controlled Containers' representatives in July 2013. The complaint states the Wades' knowledge of the PODS business was promising for a business relationship with Climate Controlled Containers and Broussard, who had developed and patented a temperature-controlled container for shipping products that need refrigeration or heat and which can maintain a near-constant temperature for 330 hours.

The complaint states Wade suggested to Broussard a PODS-style leasing system for the cold boxes instead of sales, and Broussard indicated he would sell the company for $15 million.

Jim Wade says he phoned his old friend, Cook, on July 28, 2013, for advice regarding the use of the cold boxes in the airline industry and, after signing a non-disclosure agreement with Broussard, said he spoke with Sid and Foster McDonald, previous business partners, about potential investments. Wade says that Cook repeatedly told him to get Sid McDonald involved as soon as possible, and Wade repeatedly told him to slow down, that he wanted to get the deal signed before investors were brought in.

The complaint states that at all times, Wade indicated to all parties that he planned on being an integral part of the business. However, the suit states, while Wade was drafting an exclusive agreement to sign with Broussard, Sid McDonald told Broussard he intended to buy the business on Aug. 28, 2013.

The lawsuit states Wade called Cook to question the McDonalds' statement that they were buying the business but Cook assured him they would both be given a 5 percent interest in the company and be involved in operations.

Shortly after, Wade says, the McDonalds began negotiations with Broussard, and Cook informed him that the deal was no longer his but the McDonalds'. According to the lawsuit, throughout September and October 2013, Wade was included on some emails but left out of others, was not invited to crucial meetings regarding the deal and on Nov. 4, 2013, Foster McDonald informed him that he did not think a relationship with PODS would happen.

Wade says in January 2014, he received an email about investing in the deal, to which he responded asking why he was being asked to invest in a deal that was his idea in the first place and in which he planned to have a position, and on Feb. 4, McDonald informed him that this was a surprise, as Cook had informed them Wade didn't want any part of the company. The lawsuit states Foster also said he wished he had known Wade's intention as they were moving forward with the deal without Wade based on Cook's representation. The complaint states the deal closed Aug. 27, Cook was given a product manager position, and the McDonalds have not returned any of Wade's calls.

Cook and the McDonalds are accused of tortious interference with a prospective contract, promissory estoppel, common law fraud, fraud by nondisclosure, defamation, conspiracy and negligent misrepresentation. CBX Manufacturing, Cold Box Express and CBX Holding are accused of vicarious liability for the tortious conduct. Broussard and Climate Controlled Containers are accused of being responsible to the plaintiffs for quantum meruit, as they would not have met or sold the company to the McDonalds had it not been for Jim Wade's introduction.

The Wades seek actual and compensatory damages, interest and attorney fees.

They are represented by attorney Lance P. Bradley of Bradley, Steele & Pierce in Port Arthur.

Jefferson County District Court case number: B-196178

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