News story

Yale begins transition; Lilly litigation continues

Thursday, 24 November 2005 ( #236 ) - MEMPHIS, TN, United States
Equipment manufacturer Yale Materials Handling Corp (YMHC) is endeavouring to take control of its mid-south regional distribution while acrimonious two-year-old legal battles with dealer Lilly Co continue in two federal courts ( News #185). Currently in Tennessee, Yale holds Memphis and Lilly retains Nashville. "Yale is engaged in an orderly transition plan" for both markets, the Greenville, North Carolina-based company said in a news release. Because of the pending litigation, Yale declined a request for more plan details. An October 17 legal opinion opened the Memphis area for YMHC. Judge JD Breen, of US District Court in Memphis, denied a preliminary injunction through which Lilly sought to prevent Yale from scuttling a dealer agreement for marketing territory comprising portions of Tennessee (in the Memphis and Jackson areas), Arkansas, Missouri and Mississippi. As a result, Yale does not consider Lilly its authorised dealer in that territory, commonly referred to as the Memphis area. But Lilly won't quit. Lilly attorneys filed a motion and an appeal in early November to overturn the opinion pending completion of legal processes, including those taking place before a US Court of Appeals. In the same order, pending trial, Judge Breen ordered perpetuation of a separate dealer agreement under which Lilly continues to represent Yale in the Nashville market. YMHC anticipates capturing Nashville too. "Although Judge Breen also determined that breaches by the Lilly Co of the commercial honesty and good faith provisions of the dealer marketing agreement would likely cause the Lilly Co not to prevail in its attempt to require that Yale renew the marketing agreement for the Nashville, Tennessee, marketing territory, the court ordered that agreement to continue pending trial," YMHC said. Yale's relationship with Memphis-based Lilly started more than 50 years ago but soured when Lilly sister company Mid-South Lift Trucks Inc (MLTI), a separate corporation formed in August 2003 in Memphis, began representing Yale competitor Toyota Material Handling USA (TMHU) in September 2003 ( News #124). Currently, MLTI represents TMHU, of Irvine, California, as an authorised dealer. As an MLTI sales agent, Lilly markets TMHU products in the Memphis territory and throughout Mississippi.