A company that bought North White Plains-based Growth Products Ltd. for $20.5 million in 2018 claims that the former owners concealed that fungicides were made in a facility licensed as a bakery.
Plant Health Intermediate Inc., an affiliate of Douglas Products of Liberty, Missouri, claims that two months ago it discovered that the Growth Products facility “has never been properly permitted for use as a chemical manufacturing facility.”
And as a result of a U.S. Environmental Protection Agency investigation, Plant Health alleges, it can no longer sell, or must “minimize the sale,” of more than 30 products.
Plant Health sued former Growth Products owners Rupert Campbell and Clare Reinbergen, both of Katonah, Sept. 4 in U.S. District Court, White Plains.
Growth Products was established in 1984 and makes fertilizers, pesticides and other products for agriculture, trees and turf, and residential uses. Its G.P. Solutions division in Florida makes products for fruit and vegetable farmers.
Douglas Products, a global agriculture products and pesticide company, is owned by the $2.5 billion Altamont Capital Partners private equity firm. It formed the Plant Health division when it bought Campbell”™s and Reinbergen”™s stock in Growth Products, and the LLC membership interests in G.P. Solutions in 2018.
Plant Health kept Campbell, Reinbergen and Nicole Campbell in executive positions and continued to operate Growth Products in North White Plains.
The deal soured five months later, when Plant Health fired the Campbells and Reinbergen for cause, purportedly for creating conditions that caused some employees to walk off the job or threaten to quit.
The executives sued Plant Health last year in Westchester Supreme Court, stating that there was no legal or factual basis for the firings. The case is pending.
Nicole Campbell also sued Plant Health in federal court last year for nearly $3.9 million, claiming that Douglas Products reneged on an agreement to make incentive payments based on the business”™ profitability from 2018 to 2020. The case is pending.
In the new lawsuit, Plant Health claims that Growth Products made several assurances about regulatory compliance, when the deal was struck. The EPA, for instance, requires product labels to be registered and to accurately list ingredients, but two of the company”™s fungicide labels were not registered.
The company had also allegedly warranted that it was in compliance with environmental laws, had received no notices of violations, had all the necessary permits and licenses, and had no pending or threatened claims for any environmental, health and safety liabilities.
Plant Health claims that it discovered deleted emails that demonstrate that Growth Products was in trouble with the EPA since at least 2016 for allegedly selling unregistered products.
When the agency inspected the company, Reinbergen allegedly told the EPA that fungicide products would not be sold until it received a new label from the EPA. But the company continued to sell the products, Plant Health claims, without the labels.
The EPA is reviewing Growth Products”™ compliance with the Federal Insecticide, Fungicide and Rodenticide Act from 2014 to 2018, according to the lawsuit.
Plant Health also claims that the sellers were supposed to transfer the 401(k) plan to Douglas Products. Instead, the complaint states, the plan was terminated and the assets were distributed to Reinbergen and the Campbells.
Plant Health is demanding unspecified damages against Reinbergen and Rupert Campbell.
Plant Health is represented by White Plains attorney Joseph P. Wodarksi. The Campbells and Reinbergen are represented by White Plains attorneys Fred D. Weinstein and Jeffrey S. Peters.
