Sriracha Shakedown: Irwindale Lawsuit Doesn't Pass Smell Test
As the battle between the makers of Sriracha and the city of Irwindale continues, the city has upped the ante, expanding their suit to include a "breach of contract" claim against the sauce makers over the foul-smelling odor coming from the plant.
This newest addition to the already ugly fight between the city and the sauce makers only adds to the notion that there's something more lurking underneath the odor claims.
The "breach of contract" claim states that the odor that many residents are claiming is making them sick is in direct violation of the contract that the two sides agreed upon when Huy Fong moved to the city from Rosemead to expand its Sriracha-making operation, the L.A. Times reports.
The latest claim is yet another tack-on against the company that has seen its relationship with the city crash and burn since Huy Fong was lured to Irwindale. The relationship with the city seemed sweet enough: Huy Fong was offered an "attractive and irresistible" loan from Irwindale that involved only paying interest on a property for 10 years, with a balloon payment at the end and the opportunity to buy the property outright, according to a statement from Founder and CEO David Tran that was put out in November. When the sauce makers began hearing about complaints against the factory in 2012, Tran, fearing the worst, sprang into action:
After the odor complaints from last year, I believed the City of Irwindale acted severely toward us without a real investigation into the matter. I felt that the City just took action without any real reason, which gave me an odd feeling. So based upon those feelings, I directed the Company to borrow from East West Bank in order to payoff the land loan with the City. I knew that the terms would not be as favorable as the City's terms. But still, even with additional expenses to the company, I felt we had to proceed with the loan with East West Bank.
This preceded Irwindale's request to shut down operations last October. Had the city succeeded in shutting down the factory then, Tran says, the company would have lost $10,000,000 in product and would be forced into bankruptcy.
Tran paid off the loan almost seven years earlier than what was agreed upon as a means to protect himself, and is alluding to the notion that the City of Irwindale is more upset over lost interest payments than chili fumes. If Tran's allegations are true, it could expose the city of Irwindale as a shady institution.
A jury trial is scheduled on Nov. 3.