By TOM GILCHRIST
For the Advertiser
BAY CITY — Michigan Sugar Co. alleges one of its customers — Louisville-based Tova Industries LLC — has reneged on a contract by failing to purchase nearly one million pounds of sugar.
A lawsuit filed this month in U.S. District Court in Bay City claims Tova — a Kentucky manufacturer, packer and distributor of food products — failed to buy 977,500 pounds of sugar it agreed to purchase in a Dec. 18, 2012 contract.
Michigan Sugar, based in Bay County’s Monitor Township, contends the contract requires Tova to buy 1.36 million pounds of sugar at a delivered price of $46.13 per 100-pound bag. The sugar was to be purchased in specific amounts and intervals between Dec. 1, 2012 and Sept. 30 of this year, according to the complaint.
Michigan Sugar claims Tova bought only 382,500 pounds of sugar between Dec. 1, 2012 and March 20, 2013.
Tova should pay $450,920 for the unpurchased sugar, according to the lawsuit.
“Tova has refused to order the remaining sugar that it is obligated to purchase pursuant to the contract, presumably because the current spot price for sugar on the sugar market has dropped, causing Tova to purchase sugar at a lower price from Michigan Sugar’s competitors,” the lawsuit states.
The Advertiser could not reach Tova representatives for comment. Tova’s website states the company operates on a “philosophy of high quality, low cost manufacturing techniques, and based on proprietary formulas and processes.”
The lawsuit alleges “Tova made … promises to Michigan Sugar that it would purchase certain quantities of sugar, at defined prices, and during certain defined time periods.”
In the lawsuit, Michigan Sugar Co. demands at least $75,000 in damages, along with interest, costs and attorney fees.
Beet sugar processor Michigan Sugar is a grower-owned cooperative with facilities in Sebewaing, Caro, Croswell and Monitor Township. The company employs 940 year-round workers and 1,450 seasonal workers, producing sugar under the “Pioneer” and “Big Chief” brands.