On Tuesday, the financier of a $10 million beef importing deal filed a breach of contract suit against the borrower, a meat importer, alleging that it illegally absconded with funds owed to the financier. The District of Connecticut case accuses the defendants, the importing company and its president and partial owner, of three business torts stemming from its alleged misconduct.
The plaintiffs are Awano Food Group Pte Ltd and Baali International Inc. Awano is a Singaporean company involved in the global pork and beef trading business. Baali is a Taiwanese corporation and the assignee of the debt owed by the defendants to Awano. The defendants are FairTrade International, Inc., a Delaware corporation with its principal place of business in Connecticut, and partial owner Rodrigo Echeverrigaray (Rodrigo), reportedly an Uruguayan citizen.
The complaint first contextualizes the dispute, explaining that the industry backdrop is “the international meat importing industry, in which financiers and importers work together to acquire large quantities of meat produced in foreign countries and sell it to customers throughout the United States.” The filing remarks that transactions are usually worth six figures or more, involve multiple supply chain players, and can take months to complete.
The plaintiffs state that Awano and FairTrade “entered into a financing agreement whereby Awano (as the financier) agreed to extend to FairTrade (as the importer) a $10 million line of credit to purchase beef sourced from various countries, including Uruguay, New Zealand, Australia, Brazil, and Argentina, to be imported and sold by FairTrade to U.S. customers.” The parties also reporteedly agreed that they would split profits and losses 50/50, and that Awano would acquire 50% of FairTrade’s stock. Rodrigo, the owner of the other half of FairTrade, supposedly, “single-handedly controlled every aspect of FairTrade’s day-to-day operations and  had exclusive access to FairTrade’s internal business and financial records.”
Under the agreement, FairTrade was meant to wire proceeds from customer sales into Awano’s account to replenish the credit line, and did so for more than a year, the complaint explained. Then, however, Rodrigo supposedly used the control he exerted over FairTrade to fraudulently deposit revenue into the account of another company he owned and make innumerous personal purchases. The plaintiffs assert that “the $10 million line of credit from Awano disappeared completely,” and when Awano eventually received answers from Rodrigo in June 2019, he admitted to diverting the funds.
For the defendants’ alleged breaches, the complaint charges them with breach of contract, violation of the Connecticut Uniform Fraudulent Transfer Act, and against Rodrigo, breach of fiduciary duty. For relief, the plaintiffs request damages, including punitive damages, and reimbursement of their attorneys’ fees, among other things.
The plaintiffs are represented by Morgan, Lewis & Bockius LLP.