Alticor fires 15 Quixtar distributors who sued
Posted by The Grand Rapids Press August 13, 2007 16:15PM
Categories: Breaking News
ADA TOWNSHIP -- Alticor Inc. has fired 15 long-term and highly influential Quixtar distributors who filed a class-action lawsuit against the direct sales giant last week.
The ramifications of the dust-up for the Ada-based parent company of Amway could be huge -- especially as the company faces increased regulatory pressure in India and the United Kingdom.
Seventeen distributors are named as plaintiffs in a scathing suit that says Quixtar operates as a pyramid scheme selling merchandise at prices so inflated it cannot be sold to anyone other than distributors.
The suit asks the court to relieve the plaintiffs from six-month non-compete clauses. The suit does not ask for monetary damages.
Such an exodus among Quixtar's upper echelon could prove costly. Quixtar said it generated $1.1 billion of Alticor's $6.3 billion in sales during 2006.
Together, the plaintiffs seeking to leave Quixtar represent about 40 percent of the company's U.S. business, said D.J. Poyfair, an attorney representing the distributors.
The situation is the first domestic public dust-up since promises Alticor made in June to reform its business as it readopts the Amway name over the next 18 to 24 months.
Quixtar is the name Alticor gave what had been its Amway direct sales operation in the United States. The company is owned by the families of its co-founders, Rich DeVos and the late Jay Van Andel.
The suit is led by Orrin Woodward, of Grand Blanc, a co-founder of Together Everyone Achieves More (TEAM), a group of Quixtar distributors.
The suit alleges the company knowingly operates as a pyramid scheme by focusing on selling overpriced products only to its distributors, known as Independent Business Owners, or IBOs.
Quixtar said it was unsuccessful trying to work with TEAM leaders to "correct issues related to Team's teaching of inappropriate business-building tactics, improper positioning of the opportunity and use of unauthorized support materials."
Alticor's media blog singled out Woodward, who has been known to draw thousands of IBOs to motivational rallies, as a "poster child for a long list of bad business practices that critics hate about our company."
Posted by The Grand Rapids Press August 13, 2007 16:15PM
Categories: Breaking News
ADA TOWNSHIP -- Alticor Inc. has fired 15 long-term and highly influential Quixtar distributors who filed a class-action lawsuit against the direct sales giant last week.
The ramifications of the dust-up for the Ada-based parent company of Amway could be huge -- especially as the company faces increased regulatory pressure in India and the United Kingdom.
Seventeen distributors are named as plaintiffs in a scathing suit that says Quixtar operates as a pyramid scheme selling merchandise at prices so inflated it cannot be sold to anyone other than distributors.
The suit asks the court to relieve the plaintiffs from six-month non-compete clauses. The suit does not ask for monetary damages.
Such an exodus among Quixtar's upper echelon could prove costly. Quixtar said it generated $1.1 billion of Alticor's $6.3 billion in sales during 2006.
Together, the plaintiffs seeking to leave Quixtar represent about 40 percent of the company's U.S. business, said D.J. Poyfair, an attorney representing the distributors.
The situation is the first domestic public dust-up since promises Alticor made in June to reform its business as it readopts the Amway name over the next 18 to 24 months.
Quixtar is the name Alticor gave what had been its Amway direct sales operation in the United States. The company is owned by the families of its co-founders, Rich DeVos and the late Jay Van Andel.
The suit is led by Orrin Woodward, of Grand Blanc, a co-founder of Together Everyone Achieves More (TEAM), a group of Quixtar distributors.
The suit alleges the company knowingly operates as a pyramid scheme by focusing on selling overpriced products only to its distributors, known as Independent Business Owners, or IBOs.
Quixtar said it was unsuccessful trying to work with TEAM leaders to "correct issues related to Team's teaching of inappropriate business-building tactics, improper positioning of the opportunity and use of unauthorized support materials."
Alticor's media blog singled out Woodward, who has been known to draw thousands of IBOs to motivational rallies, as a "poster child for a long list of bad business practices that critics hate about our company."
No comments:
Post a Comment