Redman & Associates Reaches Deal With Chinese

Rodney Redman, president and chief operating officer, stands with Mel Redman, chairman and chief executive officer, in Redman & Associates’ home office. The CEO has weathered a lawsuit and bankruptcy. | (Photo by Beth Hall)

Redman & Associates, the Rogers company that had hoped to take over the manufacturing of battery-operated riding toys for sale to Wal-Mart, has called a temporary truce in its legal dispute with Chinese importer Sales Chief Ent. (Hong Kong) Co.

R&A asked for a 90-day extension on the deadline for Sales Chief to respond to a federal lawsuit Redman & Associates filed on Sept. 5. R&A attorney Mark Henry of Fayetteville said that since the lawsuit’s filing, Redman & Associates and Sales Chief have been conducting “intense negotiations” in an effort to agree on a temporary extension.

The truce will allow toy cars manufactured by Sales Chief to reach Wal-Mart shelves for the holiday shopping season. Sales Chief’s new deadline to respond to the lawsuit, if a permanent agreement isn’t negotiated, is now the day after Christmas, Dec. 26.

Henry said the agreement will “streamline” the lawsuit as well because some of the items in dispute will be distributed to Wal-Mart. “We’re trying to make sure Wal-Mart is well served,” Henry said. “We’re trying hard to get along. Redman is putting Wal-Mart’s interest first.”

R&A filed a $20 million lawsuit against Sales Chief after the Chinese manufacturer demanded an up-front payment for all battery-operated cars that were to be shipped to the United States for sale in Wal-Mart stores, including those already shipped or in transit. R&A had acted as a vendor for Sales Chief’s manufactured 6-volt and 12-volt toy cars to be placed in Wal-Mart stores but announced last year its intent to begin manufacturing the 6-volt cars in Rogers.

R&A alleged in the suit that Sales Chief’s demand for up-front payment, which it said would be approximately $10 million, was an attempt to disrupt Wal-Mart’s initiative to bring more manufacturing jobs back to the U.S.

Redman & Associates was to produce 100,000 of the 6-volt toy cars this year through its Nuvzn Technologies LLC in partnership with Bentonville Plastics. That is roughly one-sixth of Wal-Mart’s annual order of the cars.

After Sales Chief demanded up-front payment, R&A closed Nuvzn and laid off 14 of 24 workers it had hired to produce and package the toys.

The extension was filed in U.S. District Court for the Western District of Arkansas, in Judge Tim Brooks’ court.