Defendant Toyota Materials Handling USA Inc (TMHU) has responded to two federal lawsuits and, separately, a grand jury has indicted Bernard Panchikal, controlling shareholder of former Toyota dealer CTK Inc, for allegedly making false insurance claims.

Two forklift manufacturers, affiliated dealers and financing sources are pursuing litigation in the US District Court in Memphis and have begun elaborating on their claims.

Yale Materials Handling Corp (YMHC) launched action against TMHU and dealer Lilly Co on July 30, alleging TMHU has caused a breach in Yale's longstanding dealer relationship with Lilly (Forkliftaction.com News #121). YMHC is headquartered in Greenville, North Carolina, TMHU in Irvine, California, and Lilly in Memphis, Tennessee.

TMHU has notified customers that it "has retained the Lilly Co, our authorised agent, to provide service and parts for your Toyota lift trucks" and listed five Lilly locations in Memphis and Jackson, Tennessee; Tupelo and Jackson, Mississippi; and Jonesboro, Arkansas. Until August 1, CTK entities represented TMHU in most of those locations under a relationship that Toyota terminated.

Lilly continues to represent Yale but, pending resolution of the litigation, Yale now lacks an exclusive dealer network in the Mid-South. Industry speculation focuses on Yale's possible scenarios to obtain other representation and TMHU's ability to make a clean transition to Lilly.

On August 27, TMHU denied most of the Yale allegations and filed a counterclaim saying Yale "is maliciously and intentionally interfering with the existing contractual relationship between Toyota and Lilly" and has "wrongfully threatened litigation and termination of dealership agreements to coerce Lilly to refrain from entering into these transactions".

Earlier, Lilly also denied Yale's accusations and filed to stop Yale's termination of its dealer agreements. An October 29 hearing will consider Lilly's request for a preliminary injunction against Yale.

On August 28, as defendant in another federal suit, TMHU filed its opposition to a hearing delay sought by three commercial financing units of Citigroup Inc, of New York. The Citigroup suit, filed on August 18, seeks recovery of financing loans to former Toyota dealer CTK and related entities and sought a September 8 hearing on its request for a preliminary injunction (Forkliftaction.com News #122).

"Such a hearing is totally unnecessary in the first place," TMHU said in a court filing. Among the complications, TMHU's counsel may need to participate in discovery depositions in the Yale case.

CTK's Mr Panchikal is among the defendants in the Citigroup suit, but he has other legal problems. On August 19, the Shelby County Grand Jury in Memphis returned a two-count indictment alleging he filed a fraudulent USD10,000 to USD60,000 insurance claim with CNA Insurance Co and a false police report. The indictment said the fraud was perpetrated against the Nashville, Tennessee, regional office of the Chicago-based global insurance firm.

Mr Panchikal, 39, posted bond on August 22 and is scheduled for an arraignment hearing on September 29 in Division 1 of the Shelby County Criminal Court.