United States District Court, S.D. New York
Attorneys for CCR International, CCR Development Group, Inc.,
and Jose Fuertes LAW OFFICES OF JANE BECKER WHITAKER By: Jane
Attorneys for Elias Group SHERMAN, SILVERSTEIN, KOHL, ROSE
& PODOLSKY, P.A. By: Jeffrey P. Resnick, Esq.
Attorneys for Banco Cooperativo de Puerto Rico FRIEDMAN
SANCHEZ, LLP By: Andrew M. Friedman, Esq. ADSUAR MUNIZ GOYCO
SEDA & PEREZ - OCHOA, PSC By: Sarika J. Angulo, Esq. Eric
Perez-Ochoa, Esq .
W. SWEET U.S.D.J.
and Third-Party Plaintiff the Elias Group, LLC ("Elias
Group") has moved, pursuant to Federal Rule of Civil
Procedure 42(a), to consolidate this action, CCR
International, Inc. v. The Elias Group, LLC, 15 Civ.
6563 (RWS), with Banco Cooperativo de Puerto Rico
v. Elias Group, LLC, 17 Civ. 6697 (RWS). See
Fed. R. Civ. P. 42(a). These actions emerge from the
agreements relating to the ownership and transfer of the
facilities and trademarks of the carbonated soda Coco Rico
("Coco Rico") and the actions taken by the parties
to those agreements. Based upon the conclusions set forth
below, the motion is granted.
Facts & Prior Proceedings
to March 31, 2008, CCR International, Inc. ("CCR")
was the owner of the soda brand Coco Rico. On March 31, 2008,
CCR and CCR Development Group, Inc. ("CCRDG")
entered into an Asset Purchase Agreement (the "March
2008 Asset Purchase Agreement") in which CCR sold,
transferred, and assigned to CCRDG all rights, title, and
interest in the Coco Rico brand, including all trademark
rights. In return, CCRDG agreed to provide CCR monies to be
paid over time. After CCRDG defaulted in its obligations to
make payment to CCR of at least $9, 000, 000, Elias Group
began discussions regarding the possibility of acquiring all
rights, title, and interest in the Coco Rico brand from CCRDG
and providing CCRDG and CCR with consideration sufficient to
terminate CCRDG's obligations to CCR.
January 30, 2013, CCR and Elias Group entered into the
Assignment Agreement (the "Assignment Agreement"),
in which CCR assigned CCRDG's purchase obligations to
Elias Group in exchange for Elias Group's agreement to
pay CCR pursuant to a formula centered on Elias Group's
efforts to purchase the Coco Rico brand from CCRDG. Pursuant
to the Assignment Agreement, Elias Group was to make an
initial payment amount up to $300, 000 to CCR, and then,
subject to certain terms and conditions set forth in the
Assignment Agreement, make monthly payments for some period
of time in a sum not to exceed $400, 000 per year. In the
event that Elias Group purchased the rights to the Coco Rico
brand from CCRDG, the Assignment Agreement provided that
Elias Group's monthly payment obligation to CCR
terminated and Elias Group would make either a yearly payment
of $450, 000 to CCR (the "Yearly Payment" option),
or Elias Group would provide CCR with a one-time payment of
$5, 000, 000, less the initial payment to CCR by Elias Group,
less monies previously paid to CCR by Elias Group, less any
other payments or other consideration paid by Elias Group to
CCRDG and/or third parties pursuant to Elias Group's
acquisition of the Coco Rico brand, as well as a possible
deduction pursuant to a sales formula set forth in the
Assignment Agreement (the "Buyout Payment" option).
April 15, 2015, CCRDG, as seller of the rights, title and
interest in the Coco Rico brand, and Elias Group, as buyer,
entered into an Asset Purchase Agreement ("April 2015
Asset Purchase Agreement") in which Elias Group
purchased all of CCRDG's rights, title and interest in
the Coco Rico brand for consideration of over $6, 000, 000
and a release of CCRDG's obligation to pay any
outstanding monies owed to Elias Group pursuant to CCR's
assignment of CCRDG's purchase obligations under the
March 2008 Asset Purchase Agreement to Elias Group. Pursuant
to the April 2015 Asset Purchase Agreement, on May 21, 2015,
Elias Group executed a promissory note in the amount of one
million dollars in favor of CCRDG (the "Note").
letter dated June 9, 2015, Elias Group advised CCR that it
elected to pay CCR pursuant to the Buyout Payment option and
that based upon the formulas in the Assignment Agreement,
Elias Group did not owe CCR any further monies.
then filed suit against Elias Group on August 19, 2015,
alleging monies owed under the Assignment Agreement. See
CCR International, Inc. v. The Elias Group, LLC, 15 Civ.
6563 (RWS), ECF Dkt. No. 1. Elias Group filed a counterclaim
and third-party complaint alleging conspiracy to frustrate
the Assignment Agreement, the Asset Purchase Agreement and an
Independent Contractor Agreement, as well as breach of
contract and fraud. Moreover, the Elias Group filed suit
against CCRDG on August 8, 2016, alleging breach of the Asset
Purchase Agreement and material misrepresentations. See
Elias Group, LLC v. CCR Development Group, Inc., 16 Civ.
62 8 0 (RWS), ECF Dkt. No. 1. CCRDG and Defendant Jose
Fuertes ("Fuertes") counterclaimed. By order of
January 12, 2017, the CCR Action and the Elias Group Action
were consolidated, and a joint discovery plan was adopted on
February 22, 2017.
September 1, 2017, Banco Cooperativo de PR ("Ban
Coop") filed a complaint, 17 Civ. 6697 (the "Ban
Coop Action"), which was assigned to the Honorable Alvin
Hellerstein, alleging breach of contract based on the Note
executed by Elias Group in favor of CCRDG on May 21, 2015,
and assigned to Ban Coop at that time. See Banco
Cooperativo de PR v. Elias Group, LLC, 17 Civ. 6697
(AKH), ECF Dkt. No. 1. On October 18, 2017, Ban Coop filed
its amended complaint. On December 5, 2017, the Elias Group
filed its answer and third-party complaint ("ATPC")
realleging its causes of action against CCR, CCRDG, and
Fuertes as set forth in the CCR and Elias Group Actions.
See id., ATPC, ECF Dkt. No. 18. The ATPC also
alleges that Section 3 of the Promissory Note provided that a
claim for indemnification would reduce the principal of the
Note and permit the Elias Group to hold back the amount of
disputed funds. See Id. ¶ 30. The
indemnification is provided in the Asset Purchase Agreement
and is one of the subjects of the Elias Group Action. The Ban
Coop Action was reassigned to this Court as related on April
instant motion for consolidation by the Elias Group, opposed
by Ban Coop, was taken on submission and marked fully
submitted on March 7, 2018.
The Elias Group's Motion to ...