Note: An earlier version of this story contained several errors, which have been corrected in this version.
A federal judge in California has ordered Tranax Technologies Inc. to pay rival Nautilus Hyosung Inc. $5 million plus more than $1,000 per day in interest stemming from a dispute between two former partners.
Tranax, an ATM manufacturer based in Hayward, Calif., must pay Hyosung America and its parent Nautilus Hyosung Inc. $5.01 million plus daily interest of $1,742.52 until Tranax pays it debt, U.S. District Judge Vaughn R. Walker ruled. Nautilus Hyosung, which is based in South Korea, is a large industrial company that sells ATMs through its Coppel, Texas-based subsidiary.
Walker entered his judgment May 25, and Nautilus Hyosung must wait 14 days from that date before taking action to seize property to satisfy Walker’s judgment, according to Grant Kim, a lawyer for Nautilus Hyosung. Kim did not disclose what actions Nautilus Hyosung may take.
Walker’s ruling, however, is not the end of the litigation between the two companies, Kim tells PaymentsSource. In another lawsuit filed May 19 in U.S. District Court in San Francisco, Nautilus Hyosung alleges Tranax's transfer of most of its assets to another company, Hantle USA, was fraudulent in nature because Hantle "did not provide reasonably equivalent consideration," Kim says.
“It is a fraudulent transfer because there is no a record of Hantle paying for Tranax’s business or customers,” Kim alleges. Nautilus Hyosung alleges Tranax created Hantle to make it difficult for Nautilus Hyosung to collect the funds the company owes it.
Hantle at one time was located in the same building as Tranax, but its registered home is now Fremont, Calif. Wongee Lee is president and CEO of both companies, Kim says.
Tranax Technologies’ officials did not return calls for comment, and the firm’s lawyer, Robert E. Freitas, was not immediately available for comment.
The dispute between Tranax and Nautilus Hyosung stems from an agreement between the two companies that went bad. From 1998 to January 2007, Tranax was Nautilus Hyosung’s sole distributor of ATMs in the U.S. and Canada.
But in 2006, Nautilus Hyosung discovered Tranax substituted another manufacturer’s cash dispenser into Nautilus Hyosung ATMs without permission. Nautilus Hysoung suspended ATM shipments to Tranax, and Tranax responded by withholding payments of outstanding invoices, according to Nautilus Hyosung officials.
Nautilus Hyosung then directly entered the Canadian and U.S. retail ATM market.
In February, the American Arbitration Association ruled in Nautilus Hyosung’s favor for its claims against Tranax. Walker’s ruling confirmed the association’s decision.
