Blue Bell, parent must pay $21.4 million in damages

June 22, 1995|By Kate Shatzkin | Kate Shatzkin,Sun Staff Writer

A Baltimore Circuit Court jury yesterday slapped the nation's largest maker of denim jeans with $21.4 million in punitive damages for concealing a tax assessment from the Baltimore-based purchasers of an air freight company.

Blue Bell Inc. and the company that controls it, V. F. Corp., also will have to pay compensatory damages of $724,336 to Wrexham Aviation Corp., a company controlled by Baltimore developer Richard A. Swirnow.

The two companies were found liable in circuit court for fraud in notdisclosing the tax liability at the time they sold Wrangler Aviation Inc. to Wrexham in October 1990. Blue Bell and V. F. Corp., the maker of Wrangler, Lee and Rustler jeans, are both based in Wyomissing, Pa.

The undisclosed tax liability that came with Wrangler Aviation was $350,000, assessed by the state of North Carolina, where the air-freight company was based.

V. F.'s treasurer, Frank Pickard, testified at the six-day trial that hedid not tell Wrexham about the tax assessment because it seemed a small sum in comparison with the air-freight company's annual sales, which were about $42 million at the time, Timothy E. Meredith, an attorney representing Wrexham said late yesterday.

Mr. Meredith argued that the jury should apply the same logic in determining an amount sufficient to punish the defendants. V. F. has annual sales in excess of $4 billion. Seeking a penalty that applied the relative dollar amounts to the much larger V. F. Corp., Mr. Meredith had sought about $40 million in damages.

Representatives of V. F. Corp. could not be reached for comment late yesterday.

"It's a tremendous amount of money for an average person to think about," said Teresa Clark, an occupational therapist from Northeast Baltimore who served on the jury of five men and one woman. "They're a big company, and though it was just one gentleman who made the decision, that's the chance he takes when he does not do things honestly."

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