TravelCenters of America LLC Wins Litigation Against Comdata
September 11 2017 - 9:15PM
Business Wire
TravelCenters of America LLC (Nasdaq: TA) today announced that
it has won its litigation against Comdata, Inc. regarding the fees
charged by Comdata to TA for processing payments at TA’s locations
using Comdata fuel cards.
As previously reported, TA began its litigation against Comdata
on November 30, 2016 in response to communications from Comdata
alleging that TA had breached certain agreements which require
Comdata to process customer transactions using Comdata cards at set
fees through January 2, 2022. Comdata had asserted that it was no
longer bound by this contract and unilaterally raised the
processing fees charged TA effective February 1, 2017. TA has
previously publicly estimated that the excess fees being charged by
Comdata have cost TA approximately $900,000 per month.
Today’s decision is included in a 101 page opinion issued by
Chancellor Andre Bouchard of the Delaware Court of Chancery after
extensive discovery and a four day trial which concluded earlier
this year. Both TA and Comdata are organized under Delaware law.
The decision orders Comdata to honor TA’s contract terms and to
reimburse TA for all excess amounts charged to TA since February 1,
2017, plus interest. The decision also requires Comdata to
reimburse TA for its reasonable attorneys’ fees. The final amount
of the payment due to TA from Comdata will be determined by post
trial proceedings which have not yet been scheduled.
Commenting upon today’s decision, Tom O’Brien, President and
Chief Executive Officer of TA, made the following statement:
“TA is pleased with today’s decision. The Court has found that
Comdata did not have a proper basis for breaching its long standing
agreements with TA and the Court noted that the evidence presented
suggests that ‘Comdata’s representation that the February rates are
what a merchant similar in size to TA would pay was not entirely
honest.’
“During this litigation, TA discovered, and the Court’s opinion
noted, that Comdata has considered ways it might hurt TA’s business
if TA did not agree to higher fees. I personally want to say a
special thank you to all the TA customers who remained loyal to TA
during our dispute with Comdata. I sincerely hope that normal
business may now continue without any efforts by Comdata to direct
business away from TA.”
The Chancery Court decision dismissed TA’s claims against
FleetCor Technologies, Inc. (NYSE: FLT), the parent company of
Comdata, because the Court found that TA had not presented evidence
sufficient to pierce Comdata’s separate corporate existence and
because there was no evidence that Comdata itself lacked sufficient
resources to pay the judgment. Also, the Chancery Court’s decision
found that TA should not be awarded triple damages under the
Tennessee Consumer Protection Act which TA had argued might apply
to Comdata’s conduct in this case.
TA is represented in this litigation by the Boston, MA office of
Ropes & Gray LLP (Jane E. Willis, Matthew L. McGinnis and C.
Thomas Brown) and the Wilmington, DE office of Skadden, Arps,
Slate, Meagher & Flom LLP (Robert S. Saunders, Joseph O. Larkin
and Jessica R. Kunz).
About TravelCenters of America LLC:
TA’s nationwide business includes travel centers located in 43
states and in Canada, standalone convenience stores in 11 states
and standalone restaurants in 14 states. TA’s travel centers
operate under the “TravelCenters of America”, “TA,” “Petro Stopping
Centers” and “Petro” brand names and offer diesel and gasoline
fueling, restaurants, truck repair services, travel/convenience
stores and other services which are designed to provide attractive
and efficient travel experiences to professional drivers and other
motorists. TA’s convenience stores operate principally under the
“Minit Mart” brand name and offer fuel as well as nonfuel products
and services such as coffee, groceries, fresh food offerings and
other convenience items. TA’s standalone restaurants operate
principally under the “Quaker Steak & Lube” brand name.
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. WHENEVER
TA USES WORDS SUCH AS “BELIEVE,” “EXPECT,” “ANTICIPATE,” “INTEND,”
“PLAN,” “ESTIMATE,” “WILL,” “MAY” AND NEGATIVES OR DERIVATIVES OF
THESE OR SIMILAR EXPRESSIONS, TA IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON TA’S
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY
TA’S FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS,
INCLUDING:
- THIS PRESS RELEASE STATES THAT TA HAS
WON ITS LITIGATION AGAINST COMDATA. COMDATA MAY APPEAL THE COURT OF
CHANCERY’S DECISION AND THE DECISION MAY BE REVERSED OR AMENDED
UPON APPEAL.
- THIS PRESS RELEASE STATES THAT THE
COURT OF CHANCERY HAS ORDERED COMDATA TO HONOR THE TERMS OF ITS
CONTRACT WITH TA. TA DOES NOT KNOW IF COMDATA WILL ABIDE THIS
DECISION OR ALLEGE SOME REASON WHY IT MAY NOT HONOR THOSE
TERMS.
- THIS PRESS RELEASE STATES THAT TA
BELIEVES THE EXCESS AMOUNT OF FEES IT HAS BEEN CHARGED BY COMDATA
SINCE FEBRUARY 1, 2017 IS APPROXIMATELY $900,000 PER MONTH. THE
FINAL ACCOUNTING OF THE AMOUNT COMDATA MUST PAY TA MAY BE MORE OR
LESS THAN THIS AMOUNT.
- THIS PRESS RELEASE STATES THAT TA HAS
DISCOVERED EVIDENCE THAT COMDATA HAS CONSIDERED WAYS IT MAY HARM
TA’S BUSINESS IF TA DID NOT AGREE TO PAY INCREASED FEES FOR
PROCESSING FUEL CARD TRANSACTIONS. TA DOES NOT KNOW IF COMDATA
INTENDS TO IMPLEMENT SUCH ACTIONS. IF COMDATA UNDERTAKES SUCH
ACTIONS, TA’S VICTORY IN THIS LITIGATION MAY RESULT IN TA’S LOSS OF
BUSINESS UNLESS TA IS ABLE TO TAKE ACTIONS TO COUNTER THOSE
ACTIVITIES.
- LITIGATION AND COURT DECISIONS OFTEN
PRODUCE UNEXPECTED RESULTS. THE COURT OF CHANCERY DECISION LEAVES
UNDECIDED THE FINAL AWARD OF DAMAGES AND ATTORNEYS FEES TO BE PAID
TO TA AND, ACCORDINGLY, THIS DECISION IS NOT YET FINAL. ALSO, AS
NOTED ABOVE, COMDATA MAY APPEAL THIS DECISION. CONTINUING
LITIGATION IS OFTEN EXPENSIVE AND DISTRACTING TO MANAGEMENT.
FOR ALL OF THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED
NOT TO PLACE UNDUE RELIANCE UPON THE FORWARD LOOKING STATEMENTS IN
THIS PRESS RELEASE. ALSO, UNLESS REQUIRED BY APPLICABLE LAW, TA
DOES NOT UNDERTAKE TO UPDATE THE STATEMENTS IN THIS PRESS RELEASE
AS A RESULT OF NEW EVENTS OR CHANGED CIRCUMSTANCES.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170911006356/en/
TravelCenters of America LLCKatie Strohacker, 617-796-8251Senior
Director, Investor Relations
TravelCenters of America (NASDAQ:TA)
Historical Stock Chart
From Aug 2024 to Sep 2024
TravelCenters of America (NASDAQ:TA)
Historical Stock Chart
From Sep 2023 to Sep 2024