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BRASPORT, S.A. v. HOECHST CELANESE CORP.

August 16, 1990

BRASPORT, S.A., PLAINTIFF,
v.
HOECHST CELANESE CORPORATION, CELANESE INTERNATIONAL MARKETING COMPANY, INC., FIBER INDUSTRIES INC., AND IAN WHITTAL, DEFENDANTS.



The opinion of the court was delivered by: Robert L. Carter, District Judge.

Plaintiff Brasport, S.A. ("Brasport"), is an Argentine corporation with its principal place of business in Buenos Aires, Argentina. Brasport was incorporated on November 16, 1982, as a wholly-owned subsidiary corporation of Comexport, a Brazilian corporation with its principal place of business in Sao Paulo, Brazil. Arthur Goldlust is Chairman of the Board of Comexport and a member of the Board of Directors of Brasport.

Defendant Hoechst Celanese Corporation, formerly Celanese, is a Delaware Corporation with its principal of business in New Jersey.

Defendant Celanese International Marketing Company is a Delaware corporation and a wholly owned subsidiary of Celanese.

Defendant Fiber Industries is a Delaware corporation and a wholly owned subsidiary of Celanese. The above defendants (hereinafter referred to collectively as "Celanese") are manufacturers and sellers of textile products.

Defendant Ian Whittall was the Celanese South America area sales manager for its textile products during the period in question and had supervisory responsibility for sales in Argentina of the Celanese products specified in the representation agreement between Brasport and Celanese.

I.

Prior to April 9, 1983, Armando Bachman, S.A., was the sole representative of Celanese in Argentina for the sale of various textile products. Juan Fabbri was the head of Bachman's textile department.

Fabbri wanted Celanese to engage him as its exclusive representative in Argentina, but Celanese was reluctant to do so without Fabbri being backed by or part of a company or organization. In that connection, Bruno Beer and Edward Weber, executives of Celbras, Celanese-Brazil, had conversations in October, 1982, with Arthur Goldlust of Comexport in the latter's office in Sao Paulo and explored with him the idea of Comexport establishing an organization in Buenos Aires, headed by Fabbri whom they praised highly, which would become Celanese's exclusive sales representative in Argentina. Goldlust went to Buenos Aires in mid-November to meet with Fabbri. On his return to Sao Paulo, he advised Celanese that he would establish Brasport in Buenos Aires with Fabbri as its managing director.

On November 24, 1982, Fabbri gave notice to Bachman of his decision to leave, effective December 15th. A termination agreement was reached which provided for payment to Fabbri of $20,000 in owed commissions. Bachman saw the announcement of Fabbri's association with Brasport in a newspaper dated December 29, 1982.

In January, 1983, Celanese notified Bachman that it was terminating the representation agreement, effective April 8, 1983. On or about April 9, 1983, Celanese entered into a representation agreement with Brasport.

Felix Bachman, chief executive officer of Bachman, testified that in or about January, 1983, he learned that Fabbri had been stealing from the company, selling Celanese products to Bachman customers on his own and pocketing funds which were owed to Bachman. On learning of these dishonesties and disloyalties, Bachman stated he informed Dennis Sabourin, a Celanese official, and Whittall of what he knew of Fabbri's illicit activities at a dinner in February, 1983, in Montevideo.

Sabourin and Whittall deny that any such conversation about Fabbri's improprieties took place. Sabourin does not remember Fabbri being discussed at the dinner. Whittall remembers Fabbri being discussed, but in the context of Bachman expressing hurt that Fabbri whom he had introduced into the business and treated like a son had left his employ.

Bachman did not advise any of the Celanese customers that Fabbri was dishonest, although he insisted on accompanying Whittall in visits to these customers in the period January to March, 1983, to insure a smooth transfer to Brasport. Nor did he ever advise Comexport, Brasport or Goldlust of these facts, and he did not lodge any complaints with authorities about the matter or take any legal action against Fabbri.

In or about late 1985, or early 1986, Goldlust began to suspect that something was not right with Fabbri's operation of Brasport, and in December, 1986, he launched an investigation. Many improprieties were found. Fabbri had diverted income received from Celanese and intended for Brasport to his own pocket. He had established his own companies and channeled business to them. He permitted his own companies to make long-delayed payments for the products they bought from Brasport, a practice which resulted ...


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