UnhappyFranchisee.com – MATCO TOOLS lawsuit by franchise owner to be settled via to arbitration.
In November, 2011, we wrote about the Matco Tools franchise lawsuit :
“…A father and son – David Villano, Jr. and David Villano III, through their attorneys, Marks & Klein, LLP of Red Bank, N.J., today filed a class action lawsuit against TD Bank and Matco Tools, Inc. alleging the tool company franchisor and the bank engaged in a loan fraud scheme to encourage unsophisticated borrowers to enter into risky business loans to buy Matco Tools franchises.
The scheme enabled Matco to sell more franchises and TD Bank to make risky loans without concern. The bank knew if the loans failed, the loans would ultimately be repaid by United States taxpayers through the SBA guaranteed loan program. Data from the SBA shows that from 2000 to 2010, Matco Tools’ SBA loans had a staggering 37.3 percent failure rate.”
On August 29, 2012 Judge Freda L. Wolfson ruled in favor of Matco and Danaher’s request for arbitration:
LETTER MEMORANDUM AND ORDER that Defendants Matco and Danaher’s Motion To Stay Pending Arbitration is GRANTED to allow the claims as between Plaintiffs and Matco and Danaher to be arbitrated as per the Distributorship Agreement; that Defendant T D Bank’s Motion to Dismiss is DENIED with leave to refile after the completion of the arbitration; that Defendant Matco and Danaher’s Motion to Dismiss is DENIED as moot; that this case is administratively terminated with the right to reopen after the completion of the arbitration. Signed by Judge Freda L. Wolfson on 8/29/2012.
Arbitration is seen by most as a serious setback for the Matco franchisee plaintiffs.
Read the Judges Memorandum & Order (PDF) here: Villano et al v. TD Bank et al (11-cv-6714)
MATCO TOOLS Franchise Complaints (4000+ comments)
MATCO TOOLS Distributor Franchise (Overview with links)
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