Smidt Lawsuit
In July 2010, founder Allan Smidt filed a lawsuit in Los Angeles Superior Court against his son, Eric Smidt, CEO, accusing him of fraud and looting the company. Allan is seeking "unspecified actual and punitive damages and an injunction for allegations of fraud, breach of trust, undue influence, negligent misrepresentation, misappropriation of assets, breach of contract and elder abuse." Company spokesman John Batten has responded to the lawsuit “Family disagreements are never pleasant, but this lawsuit is incredibly sad. The assertions in the complaint are completely unfounded and they will be addressed in due course. None of this will affect the business or continued success of Harbor Freight Tools."
A settlement was reached between Allan and Eric as of April 2011, the details of which have not been released.
Read more about this topic: Harbor Freight Tools, Legal Issues