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September 16, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Rockland pill producer Chartwell Pharma sues Florida distributor for $4.1M

Chartwell Therapeutics Licensing LLC in Congers is demanding payment for pills, $4.1 million worth, that it claims a distributor has refused to reimburse.

The Rockland County company sued Harris Pharmaceutical Inc. of Fort Myers, Florida, on Feb. 13 in federal court in White Plains.

“Harris has an obligation to properly calculate and account to Chartwell” for its costs and profits, the complaint states.

Harris did not respond to an email request for comment.

Chartwell Pharmaceuticals, established in 2010, produces millions of capsules and tablets a day in its Rockland facility. Jack Goldenberg is the managing member of the LLC.

The drug at issue is doxycycline hyclate, an antibiotic that is used to prevent malaria and treat a wide variety of infections, including sexually transmitted diseases, acne and skin infections, and flea and tick diseases.

Harris specializes in selling generic dermatological medicines.

Chartwell agreed to sell capsules and tablets on consignment in 2014. After Harris received payments from its customers, it was required to reimburse Chartwell for the cost of the goods and a split of the profits. Harris agreed to calculate the profits, minus expenses such as rebates, logistics and marketing costs, and to report the figures to Chartwell every month.

Chartwell claims that Harris stopped reporting the numbers and failed to pay the agreed upon cost of the pills or the full-profit split.

“Indeed, in or about January 2018, Harris admitted that it owed Chartwell more than $3.1 million in profit split for the year ending 2017,” the complaint states, “but has failed to pay any portion of this amount.”

Chartwell terminated the sales agreement as of Jan. 31, 2018, but continued to do business with Harris under new terms. Harris had to pay for the products up front and was still required to report and pay a share of the profits.

But Harris, according to the complaint, has failed to provide a complete accounting of its profits and Chartwell charges that it has been shorted by at least another $1 million.

The complaint accuses Harris of breach of contract and unjust enrichment and is demanding at least $4.1 million.

Chartwell is represented by attorneys John P. Amato and Steven R. Aquino, of Hahn & Hessen LLP of Manhattan.