Chicago, Illinois, May 25, 2004

FVLD Wins Commercial Bribery Appeal In Seventh Circuit

On May 21, 2004, the Seventh Circuit issued its mandate in Williams Electronics Games, Inc. v. Garrity et al., in which FVLD represented Williams. Williams manufactured pinball and electronic arcade games, including Mortal Kombat. Williams had retained FVLD to conduct an internal investigation and FVLD eventually discovered that several of Williams’ primary electronic vendors, including Arrow Electronics, Milgray Electronics (now Bell Electronics) and Procomponents, Inc. had been secretly paying bribes to one of Williams’ managers in return for tens of millions of dollars in purchase orders. FVLD followed up its investigation by initiating recovery efforts that netted Williams millions of dollars. Only two of the last three remaining defendants, Arrow and Milgray, managed to escape judgment and only then by raising affirmative defenses at trial that did not exist under Illinois law. Williams appealed the defenses and the Court of Appeals agreed that both Arrow’s and Milgray’s defenses fundamentally misstated the law and should never have been submitted to a jury. The Appeals Court not only reinstated Williams’s fraud, consumer fraud and equitable claims against these two electronics distributors but also agreed that Williams could require Arrow and Milgray to account for all of the profits on their sales to Williams and make restitution to Williams as a deterrent further wrongdoing.

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