Business

$70 million family business legal dispute is dismissed by federal judge

A sign on the side of Liberty Water Tanks advertises galvanized water tanks. The property between Liberty and Dunnville in Casey County is one of several in the Tarter family of companies.
A sign on the side of Liberty Water Tanks advertises galvanized water tanks. The property between Liberty and Dunnville in Casey County is one of several in the Tarter family of companies. gkocher1@herald-leader.com

A federal judge has dismissed a racketeering suit that pitted relatives in the Tarter companies of Casey County against one another.

Last year, Anna Lou Tarter Smith and her children, Luann Coffey and Douglas Tarter, shareholders in the Tarter companies, sued Smith’s cousin, Joshua Tarter, president of Tarter Industries; a Hong Kong firm called QMC Industry Co.; and an executive named Thomas Lewis Gregory, who resigned in 2016 from the Tarter companies.

The allegations were that Joshua Tarter, Gregory and QMC conspired to use trade secrets to divert cost savings from the Tarter companies to their own benefit. The allegations were that $70 million in savings were diverted over seven years.

U.S. District Judge Danny Reeves ruled this week that Smith, Coffey and Douglas Tarter “have not plausibly alleged” that they were injured as shareholders.

In a statement, Smith, Coffey and Douglas Tarter said: “While we were disappointed with the court’s decision, it was not a ruling on the merits of the case. It is unfortunate that the ruling will create additional delay, but we are committed to seeing this matter through to a final ruling on the merits of the case.”

The Tarter companies, headquartered in Dunnville, make gates, corrals, kennels, mowers, rodeo chutes, welded steel tubing and galvanized water tanks. The products are made by Tarter-controlled companies in Casey County, including Green River Gate Co., Liberty Water Tanks and Tarter Tube.

Tarter bills itself as “the largest manufacturer of farm gates and animal management equipment in North America.”

The plaintiffs sued under the federal Racketeer Influenced and Corrupt Organizations Act, known as RICO. The 1970 law’s original purpose was to give federal prosecutors a tool against organized crime and mobsters, but the statute has been applied to civil cases.

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