XPO Logistics of Greenwich, Connecticut, is suing Prestige Brands Inc., the Elmsford consumer products company, for $7 million for allegedly withholding payments from the warehousing company for more than a year.
XPO Logistics’ affiliates filed the complaint June 9 in U.S. District Court in White Plains.
Prestige Brands “accepted the benefit of XPO”™s services ”¦ without objection, protest or rejection,” the complaint states, “yet failed to compensate XPO for the reasonable value of its services.”
Prestige, which bills itself as the “largest independent provider of over-the-counter products in North America,” makes and sells popular products such as Dramamine motion sickness relief, Efferdent denture cleanser, Fleet enemas, Monistat yeast infection treatment and Summer”™s Eve feminine hygiene.
XPO Logistics is an international, transportation and warehousing supply chain company.
Prestige and XPO Logistics affiliates in North Carolina agreed to a warehousing and transportation deal in 2012, according to the lawsuit, whereby XPO would store products in two Missouri warehouses and then pack and ship them to Prestige customers, such as CVS and Walmart.
Prestige allegedly stopped paying for the services in January 2019. This past April, a Prestige official notified XPO that it was deducting more than $4 million from its account balance, according to the complaint, “as a result of XPO”™s numerous contractual breaches.”
XPO Logistics claims that the purported breaches concern alleged activities in 2017, and that Prestige has not cited any problems for the services invoiced for 2019 and 2020.
As of May, Prestige products were no longer being delivered to XPO warehouses, according to the complaint, and all inventory had been shipped out of the facilities, “per Prestige”™s direction.”
XPO claims that Prestige used the impending end of the contract, June 30, when XPO will no longer have an enforcement remedy, as an opportunity to stop paying for services.
XPO claims that Prestige owed $6 million when the complaint was filed and will owe $7 million by June 30.
XPO accuses Prestige of breach of contract, unjust enrichment and failure to pay the reasonable value of services it accepted.
Prestige did not respond to an email asking for its side of the story.
Prestige Brands is a publicly traded company with a market capitalization of more than $2 billion. It booked revenues of $963 million in the last fiscal year, ending March 31.
XPO has a market cap of $6.8 billion and annual revenue of $16.4 billion.
XPO is represented by Manhattan attorneys Mark W. Lerner, Mark P. Ressler and Melissa A. Barahona of Kasowitz Benson Torres LLP.
