Guthy-Renker Sues National Media Corp. Alleging Fraud And Breach
Of Contract
-- With Their Companies' Fortunes Reading In Opposite Directions, Infomercial
Heavy-Weights Move Competition From Television To Courtroom --
PALM DESERT, Calif., Feb. 19 /PRNewswire/ -- Guthy-Renker, the nation's largest marketer of products via
infomercial, today acknowledged that it filed suit against National Media Corp on February 10 for allegedly committing
fraud, breach of contract and negligent misrepresentation in connection with Guthy-Renker's hugely successful Fitness
Flyer exercise equipment. The dispute increases friction between the infomercial industry's two largest companies whose
fortunes have recently been heading in opposite directions: National Media's stock has dropped in value by roughly
two-thirds in the last year.
The current dispute arose, according to Guthy-Renker, from National Media's violation of an agreement to market Fitness
Flyer on a limited basis in the United States as well as National Media's subsequent creation and marketing of two similar
products. Guthy-Renker owns the Fitness Flyer intellectual property rights and granted National Media limited rights to
distribute the Fitness Flyer product.
"As we allege in our complaint, National Media concealed its intentions to distribute two knock-off products and its
actions are in violation of our agreement," said Ben Van de Bunt, executive vice president of Guthy-Renker. "We are
surprised National Media, the only publicly traded company in our industry, would engage in this type of conduct."
Guthy-Renker is the largest domestic producer of high-quality infomercials and products designed for home shopping and
direct response television sales with annual sales in excess of $300 million. The company is based in Palm Desert, Calif.
and was co-founded in 1988 by Bill Guthy and Greg Renker. Guthy and Renker have been cited as among "America's
Smartest Young Entrepreneurs" by Fortune magazine and received a regional Entrepreneur of the Year award from Inc.
magazine. The company enjoyed a 100 percent growth in revenues in 1996, a year in which the company won six NIMA
industry awards, including Infomercial Of The Year. SOURCE Guthy-Renker |
