SPRINGVILLE — The former owner of Neways International and his two sons, accused of using inside information to start up two competing businesses, are claiming innocence after a federal judge ordered them to return any record of such information to Neways.
Thomas Mower Sr., Neways' former owner, and his sons, Thomas Mower Jr. and Darick Mower, founded SISEL International LLC and SupraNaturals LLC after selling Neways to Golden Gate Capital, a San-Francisco-based equity firm, in 2006. Although they always intended to launch a competing business, Phillip Hadfield, legal counsel for the two companies, said the Mowers did not use information from their former business to do so.
"We don't have their trade secrets, and we are not using them in our company dealings," Hadfield said.
During a May 25 hearing, U.S. District Judge Bruce S. Jenkins did not ascertain whether SISEL and SupraNaturals had access to a computer disc containing Neways' distributor lists, vendor lists and product formulas. He did, however, order the Mowers to return such a disc if it did, in fact, exist.
Neways petitioned the court to place a temporary restraining order on SISEL to keep it from marketing SupraMaxx, a mineral supplement, which it claims was based off its product Maximol. The court postponed a hearing on the matter to June 18.
Neways spokesman James Watson said SISEL, which is also a multilevel marketing company, is using company lists to steal distributors and vendors. Both companies deal in cosmetics and health supplements. SupraNaturals manufactures personal care products and dietary supplements.
"Distributor lists are quite serious and quite important," Watson said. "That's how we market our product. We don't sell through stores, we sell through distributors."
Hadfield said some vendors and distributors may have started doing business with SISEL rather than Neways but did so as a result of the competitive nature of the market. The company is not using lists obtained from Neways to secure leads, he said.
"If there's some concern on their part that we are competing, our response is that nobody has signed any type of no-competition agreement," he said.
Hadfield said Thomas Mower Sr. offered to sign a non-competition agreement when he sold Neways, but Golden Gate Capital opted instead to buy the company "as is" in exchange for a lower price tag. The Mowers did not agree to nondisclosure or confidentiality covenants, he said.
It isn't competition Neways is worried about, Watson said.
"We allow them to compete — that's great," he said. "We just can't allow them to cheat."
SISEL and Supranaturals have no interest in Neways' confidential information, SISEL CEO Thomas Mower Jr. said in a press release.
"We have not, and will not, use any of Neways' proprietary formulas or other information," he said. "SISEL's success derives from its superior personal care and nutritional products and its outstanding family of distributors around the world."
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