Platinum sued again, but two other cases dismissed
AMERICAN FORK, Utah--Financially beleaguered Platinum Protection, a summer-model company here that laid off most of its employees in February, is facing another lawsuit, this one filed by the Ohio attorney general, charging that Platinum engaged in "false and misleading" sales practices in that state.
However, two other civil lawsuits brought against the company in federal court earlier this year--one filed by its former primary dealer, Dallas-based Monitronics, and the other by CPI Security Systems, a North Carolina-based monitoring company--have been voluntarily dismissed by each of those companies.
The CPI lawsuit, filed March 29 and alleging that Platinum defaulted on a $700,000 loan CPI made to the company in January, has been settled, according to court documents filed in May.
Ken Gill, CPI president and CEO, told Security Systems News in a June 8 email interview that his company's policy is not to comment on litigation. He would only say: "We have resolved our issues with Platinum. We wish Platinum the best in their future endeavors."
CPI claimed at the time of its filing that Platinum was not able to properly maintain the 350 customer accounts that were collateral for the loan because the company "appears to be in severe financial distress."
Concerns that Platinum and its parent corporation, Platinum Protection-CA, were "in the process of shuttering their business" were also cited in the lawsuit filed by Monitronics on Feb. 9 in U.S. District Court in Utah. That was just one week after Platinum reportedly laid off almost all its employees, including corporate staff, sales representatives and technicians.
In the lawsuit, Monitronics contended Platinum owed it more than $2 million for bad accounts and loss of revenue guarantees, and it was seeking to take possession of 6,255 accounts it said that Platinum still had in house as collateral.
But Monitronics on May 25 filed a notice in court that it was voluntarily dismissing the lawsuit. No reason was cited, and Monitronics and its lawyer did not respond by SSN's deadline to a request for comment on why the lawsuit was dismissed.
Platinum CEO Jared Hallows and the company's lawyer did not respond by SSN's deadline to a request for comment on the CPI and Monitronics lawsuits, the status of the company, and on the allegations by the Ohio attorney general.
Ohio Attorney General Michael DeWine filed a complaint on June 6 charging that Platinum had violated Ohio's consumer protection laws.
DeWine charges that Platinum sales reps made "false or misleading statements" to customers that included saying the customers' security companies were bankrupt or defunct and that Platinum had purchased the customers' security contracts.
Also, DeWine accuses Platinum of such unfair or deceptive practices as not allowing customers to rescind their contracts during the legally mandated three-day period, and promising customers prices for their systems that were lower than what the company actually charged them.
DeWine is seeking reimbursement from Platinum for customers and a $25,000 fine for each violation committed.
The lawsuits against Platinum and the layoffs have all occurred since an announcement in December by the U.S. Securities and Exchange Commission that it had charged Utah residents Wendell Jacobson and Allen Jacobson with running a $220 million real estate Ponzi scheme. The Jacobsons provided the primary startup capital for Platinum, but Platinum has said it had sundered all ties to the family as of last summer. The SEC case against the Jacobsons is pending.