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Gordon & Rees Team Defeats $7 Million Breach of Contract and Misappropriation of Trade Secrets Claims

On April 9, in an extensive written decision following two weeks of hard-fought arbitration in a Chicago conference room while the outside temperature rose to 3 degrees, an AAA arbitrator handed Gordon & Rees partner Richard Sybert and senior counsel Benni Amato and their client Ryko Solutions, Inc. a major victory in beating back a plethora of claims ranging from breach of contract and misappropriation of trade secrets, to theft of key employees and software.

Ryko, headquartered in Des Moines and one of the largest manufacturers and sellers of automated car wash equipment in the world, had entered into a joint agreement with the claimant Intelio Systems, a developer of software and car wash activation units. After years of a bumpy business relationship and finally non-renewal of the agreement, Intelio brought an arbitration against Ryko, claiming misappropriation of software code, unfair competition, wrongful hiring of key employees, and multiple breaches of contract. Intelio sought not only damages amounting to more than $7 million, but also an injunction that would prevent its former employees from working for Ryko.

The arbitrator rejected all of Intelio’s multiple claims, awarding only minimal royalties that Ryko had been withholding pending resolution of the dispute, which themselves are subject to offset from monies due Ryko for parts previously purchased under the expired agreement. At the end of the day the net result will be close to a “walk-away.”

Ryko Solutions is a Portfolio Company of Trivest Partners. Together with the management team, Trivest Partners recapitalized Ryko Solutions in 2010. Trivest Partners is a private investment firm that focuses on partnering with founder/family owned businesses in the United States and Canada. Since its founding in 1981, Trivest has completed more than 200 transactions, totaling over $5.1 billion in value.

Richard P. Sybert