An escalating legal battle among co-founders of a Bakersfield table-grape breeding company may have lasting implications for growers of Kern County's top crop. International Fruit Genetics LLC filed a lawsuit Thursday accusing co-founder Jack Pandol and his company, Shafter-based Grapery, of appropriating trade secrets to plan a competing operation with an unfair market advantage.
Much of the conflict dates to an unsolicited, third-party purchase offer IFG received last summer. Grapery was invited to make a bid, and as part of that process, it received confidential information about IFG's proprietary fruit varietals, pricing, sales volume and other extensive insights, according to IFG's lawsuit.
Pandol's suit said he opposed the sale because he worried about losing his rights under his operating agreement with IFG. Regardless, the 75-percent owners of the company, the Stoller family, went forward with a sale announced in March that still has not cleared a key regulatory hurdle.
The injunction issued earlier this month largely passes the matter to an arbitration panel; it will not necessarily halt IFG's proposed sale. An update on the panel's deliberations was not available Thursday.
The injunction decision essentially found that Pandol, who has long served as a manager at IFG and was the company's interim CEO from April 2016 to February 2017, has some likelihood of prevailing in court with his assertion that the sale of any IFG variety cannot be carried out without his consent.
IFG's suit, also filed in Kern County Superior Court, says Grapery's offer for IFG in August was substantially lower than other purchase offers that have come in. It alleges Grapery has used information covered by an Oct. 29 nondisclosure agreement to move forward with plans for a fruit breeding program that would compete with IFG.
The lawsuit says part of IFG's concern is that Pandol as a manager at the company has pushed for more restrictive licensing than the other owners were comfortable with. It said IFG looked into and ultimately rejected Pandol's ideas for effectively raising fruit prices by consolidating production among fewer growers.
Grapery reached out earlier this year to IFG's breeding partner at the University of Arkansas, the suit says, about entering a similar relationship with Grapery. The suit says the company's communications demonstrated an understanding that must have come from Grapery's and Pandol's access to confidential, proprietary information from IFG.