Care A2 Plus fights Federal Court green light for US lawsuit
Care A2 Plus, the local infant formula producer targeting a $500 million ASX float, has asked the Federal Court to reverse a decision that has led its distribution partner in the United States to sue its founder, chief executive and chairman in a Miami court.
The move is an escalation of a dispute between the company and Gensco Pharma, which has alleged it lost more than $200 million in future profits because Care A2 misled it when it claimed to be able to produce almost five million tins of formula per month to supply to the US, which was suffering a major shortage in supply last year.
Care A2 Plus was one of a small number of overseas infant formula producers allowed to import into the United States.
Care A2 was one of few local companies, alongside its larger rivals Bubs Australia and The a2 Milk Company, to gain special access to the US – where imports had been heavily restricted – in a move that surprised the market given its small size and negligible sales.
Despite Florida-headquartered Gensco already filing a claim in the US, Care A2 and its director, Kerry Hyland, have asked for leave to appeal a Federal Court decision in August that allowed its former distributor to do so.
Gensco is personally suing Care A2 founder Dominic Galati, chairman Walter Bungo and chief executive Steve Loader in a Miami-Dade County circuit court alleging fraud and negligent misrepresentation.
The filing includes allegations that Care A2 made false claims about its ability to supply the US with baby formula tins amid a major shortage due to a contamination issue at one of the country’s largest manufacturers, in Michigan.
The three men are not parties in Gensco’s action in Australia against Care A2 and Ms Hyland. In Australia, Gensco is
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