Canadian Manufacturing

Tinley’s to upgrade mini bottling line as part of settlement agreement

by CM Staff   

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Under the settlement, Tinley’s made a reduced payment to the contractor on the engineer’s behalf in return for an agreement.

TORONTO and LOS ANGELES — The Tinley Beverage Company Inc. announces that it will be installing an upgraded mini line in its Long Beach facility as part of a comprehensive resolution to the dispute with the vendor for the original facility buildout.

In July 2020, one of the contractors that had been retained by the engineering firm managing the buildout of Tinley’s Long Beach facility filed a third-party complaint against this engineering firm. The claim was related to work the contractor had performed at the facility. While Tinley’s was not a party to the contract, the Company and its landlord were named in the enforcement of a mechanics lien that was placed on the facility.

Under the settlement, Tinley’s made a reduced payment to the contractor on the engineer’s behalf in return for an agreement for the supply and installation of an upgraded mini line at Tinley’s Long Beach facility at a discounted price. The Company believes that the total cost of the settlement payment associated with the dismissal and discounted mini line is contracted at a price that is lower than the cost the Company would have otherwise incurred had it acquired and installed this mini line via other vendors at normal market rates. The Company believes it has satisfied its obligations under the settlement, therefore ongoing litigation is expected to formally end at the final hearing for dismissal, which is scheduled to occur on October 29, 2021.

Under a new engineering services and equipment supply agreement with the original engineering firm, Tinley’s will receive an upgraded mini bottling line at its Long Beach, California facility. The current mini line had been acquired via a royalty agreement with the vendor. Under the terms of the royalty agreement, the Company is entitled to a receive a complete return of the cost of the equipment upon delivery of the current mini line equipment to the vendor. The Company will use its existing mini line to service its current and anticipated mini line clients until the installation of the new mini line is complete. The Company currently expects to continue to consummate manufacturing agreements with additional third-party brands that require mini bottle formats.



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