Hey banana you asked "So you think Banks made up the story about humidity and shelf life problems as an excuse?"
Banana if you do some DD you'll find that napkins sold with no problems for years...Only problem was lack of sales not defects...
Too answer your question no Banks didn't make up the humidity problem but maybe Highford did...lol
And if there was a humitidy problem it was due to "one of its Chinese subcontractors was not supplying a source material to specification"
So it could of been a one time problem...the bigger problem was getting money for paper!!Product sold in Walmarts and there is high humidity in some states...lol
If just one incident, one lawsuit,one complaint of nakins melting between legs occurred...Walmart would of removed them from selves ASAP!!!
Cons Ecoprogress blames defects on Chinese supplier
2007-11-19 16:09 ET - Street Wire
by Stockwatch Business Reporter
Consolidated Ecoprogress Technology Inc. is defending itself from allegations that it misled Highford Holdings Ltd. about the size of its business. In a statement of defence filed in B.C. Supreme Court on Oct. 29, 2007, it says any dispute about its inability to deliver on a distribution agreement is governed by the arbitration clause of the distribution agreement and that it made no misrepresentations.
The claim
The plaintiff, Highford Holdings, is a Hong Kong-based distributor. It claims that it signed a distribution agreement with Consolidated Ecoprogress after John Banks, Consolidated Ecoprogress's president, told its manager Cora Chu that the company had five factories in China and a large catalogue of products. Highford Holdings alleges that these claims were false.
Highford paid $150,000 (U.S.) and bought 1.25 million shares of the company for another $187,500 (U.S.) for the right to distribute Consolidated Ecoprogress products -- including towels, napkins and panty liners -- in China, Hong Kong, Macau and Taiwan. It claims the first shipment, which it received on Oct. 2, 2006, was defective. It wants the court to cancel the distribution agreement or force Consolidated Ecoprogress to return the $337,500 it spent for the agreement.
The defence
In its defence, Consolidated Ecoprogress claims that Mr. Banks and the company never told anyone at Highford it had five factories in China. It says its manufacturing process, including where it makes its products, is a closely guarded secret that it would not reveal to a new business partner. The company says that while it was negotiating with Highford's Ms. Chu and Tony Ma, it was using three factories -- not five -- to produce its products. It points out that negotiations were done with interpreters.
Consolidated Ecoprogress says it showed Ms. Chu and Mr. Ma samples of prototype diaper products during negotiations, but that it was clear that these products were not yet in production. It denies that Mr. Banks made any false representations.
According to Consolidated Ecoprogress, the other complaints in the lawsuit are a matter for arbitration, not the courts, but it offers details on the problems Highford had with the products.
It seems Consolidated Ecoprogress's products could not stand up to the humidity in Hong Kong. The company and Highford agreed to replace the defective products with new ones, and Consolidated Ecoprogress sent Highford progress reports as a sign it was doing something. Then new complaints surfaced, and the company found that one of its Chinese subcontractors was not supplying a source material to specification. The company says it and Highford then agreed to use an entirely new type of film for the products.
Technical problems delayed this new film and it is still being developed. Consolidated Ecoprogress says its lack of money is contributing to the delay.
It also mentions an investor in Highford Holdings that is demanding repayment from Highford. Consolidated Ecoprogress says both entities are being unrealistic when they expect "a new material in a technically challenging field to be delivered very quickly." It says it "has made its best efforts to address and resolve issues with the products having found unanticipated problems with the Asian environment."
Consolidated Ecoprogress says cancelling the distribution agreement, as Highford wants, would endanger its intellectual property and that it has "acted in good faith in difficult circumstances to address the concerns of Highford." It argues that this a trade issue outside the court's jurisdiction while the arbitration clause exists and reiterates that it made no misrepresentations.
None of the allegations have been proven in court.
The spin
In a press release dated Nov. 13, 2007, Consolidated Ecoprogress took an optimistic view of the lawsuit. It thought Highford had decided to sue "to preserve its position" while waiting for "the conclusion of product development in North America precipitated by the substitution practices of the company's China-based manufacturer."
