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Radko Supplier to Sell Direct

Rauch Lawsuit Active Again

By Staff -- Gifts and Dec, 8/17/2007 10:13:00 AM

Cracow, Poland — Northstar, the Polish Christmas ornament company that makes most Christopher Radko ornaments, is now offering to sell ornaments factory direct to the U.S. market. The offer comes at a time when Radko himself is enmeshed in litigation with Rauch Industries, the company that owns the brand bearing his name.

In May, Rauch brought suit against Radko alleging, among other charges, that Radko secretly owned Northstar and affliated companies. Rauch claimed that Radko was using this undisclosed relationship to overcharge for the 80 percent of the Radko Division’s Christmas ornaments the supplier produces, to the tune of more than $5 million. The suit alleged breach of contact, fraud and more and asked for some $60 million in damages, including lost revenue from a potential acquisition allegedly scuttled by Radko.

In July, Radko filed a motion to dismiss one count of the complaint on the grounds that the relevant state law, the North Carolina Unfair Trade Practices Act, does not apply in the employment or securities context. At the time, Rauch asked the court for a 30 day extension to negotiate a resolution.

However, these talks were evidently unsuccessful: On August 6th Rauch filed a court document opposing Radko’s motion to dismiss, and shortly thereafter Northstar began offering ornaments for sale to the U.S. retail market, effectively going head-to-head with Rauch. Northstar's message mentioned the company's experience manufacturing Radko brand ornaments, but not Radko's alleged ownership of the company.

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