Document LMJDZvRyBB8d8oMvm9Emyaa5

INDUSTRIES INTERNAL CORRESPONDENCE SUBJECT Dutch Boy Franchises Report Preliminary TO Gray Castle ebo m William R. Admirand COMPANY UNIT 0GC COMPANY UNIT OGC DATE December 18, 1974 Pursuant to your request, I have developed the following information concerning Dutch Boy franchisees. Name of Franchisee James B. Wolfe Location Grants Pass, Oregon Allegation Breach of exclusive franchised Damages Alleged None specified Status I have contacted claimant's attorney, Michael Bird. Settlement in process whereby we accept back saleable product and discount it against moneys owing to us. Frenchise ended. Name of Franchisee Norman Burch d/b/a Paint Store Location Coos Bay, Oregon Allegation 1. Breach of exclusive franchise ^ 2. Defamation in business relations Damages Alleged 1. None specified. 2. None asserted directly, but NL should indemnify claimant from damages asserted by Pacific Paint Porducts, a local contractor as a result of defective pigment in product (contractor is threatening NL with a $125,000 suit). Alleged ML Defense 1. Franchisee breached franchise-dropped Blue & White line. 2. None Status I will call attorney to open lines of communication. Name of Franchisee Thomas & Philip Nesmith d/b/a Decorator Paint Store Location Lake Havasu City, Arizona Allegation Breach of exclusive f* franchise ML 000041469 ^ Ub G> SilJj'k& jpWuoK' ci i . rp Li Li FA \/ 2- - Damages Alleged $250,000 compensatory $500,000 punitive Alleged NL Defense Conflict of Reasons: 1. Poor credit-cancelled franchise. 2. Non-payment of accounts and suit arose due to NL activity. Status Defense counsel not yet selected. Since our discussion, I have spoken with a West Coast manager. He said that effective January 1, Dutch Boy intended to "purge'1 small dealers and "troublemakers". I said don't. I also spoke with an East Coast manager. He knows of nothing imminent but is reluctant to inquire in that the kettle may boil over. I also spoke personally with Walter Schultz, Vice President, who was in the office on Tuesday. He appears willing to sit down around the table in West Caldwell to work out a plan of action. I informed him of our willingness to assist him in his goals. Attached please find copies of two franchise agreements of which I have knowledge. Not covered are distributor agreements. At your convenience, I will be available to discuss this matter further with you. WRA:mb enc. NL 000041470