International Law

Usana Health Sciences Pays Off

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Barry Minkow and Sam Antar got paid out by USANA to stop their investigations into the USANA business model.

At least, that is how I read the following press release about the settlement between USANA and Minkow.

"USANA Health Sciences, Inc. (NASDAQ:USNA), Barry Minkow and the Fraud Discovery Institute (FDI) today announced the settlement of their lawsuit pending in the United States District Court for the District of Utah.

USANA has agreed to withdraw its lawsuit and Mr. Minkow and the FDI have agreed that they will not trade in USANA's stock in the future, will remove information regarding USANA within their control from the internet, and will not publish any further statements about USANA.

All outstanding issues have now been resolved to the parties' satisfaction, and USANA and FDI look forward to putting this litigation behind them and moving forward with their respective missions.

Barry Minkow stated: "For us this was a business decision. Considering the size of the Fraud Discovery Institute, we had to make an allocation of resources and we decided that rather than continuing a lawsuit we would devote our efforts to our primary mission - the investigation and uncovering of fraud. We look forward to continuing that mission with vigor."

I see, Minkow won the SLAPP suit, gutted the USANA lawsuit, and received attorney fees  -then he settles?!!?!

Ok, here is what I think has happened: Sam and Barry picked up a nice chunk of change for agreeing not to say anything bad about USANA.  And both signed confidentiality agreements not to disparge USANA or dislcose the amount of money they received.

Good for them, I say.

Except, I don't like the business model: Attack a dubious company, and hold out for the greenmail.

From my understanding, this is the model the Ed Marsden over at Rip-Off Report uses - a bastardization of the BBB model which he hates so much.

Full post as published by Misleading Advertising Law on July 30, 2008 (boomark / email).