Allied-Signal Loses General Poly Dispute

A federal jury said Thursday that Allied-Signal Inc. must pay General Poly Corp. more than $70 million because of actions that the now-defunct plastic bag maker says forced it to seek bankruptcy law protection.

Allied-Signal, a multinational company based in Morristown, N.J., immediately announced that it would ask the judge in the case to set aside the jury’s verdict. If the judge declines, Allied-Signal will appeal, spokesman Dennis J. Signorovitch said.

Brian D. Forrow, Allied-Signal’s senior vice president and general counsel, said the company “strongly believed the evidence presented at the two-month trial overwhelmingly supported the company’s position.”

The jury decided that Allied-Signal didn’t fulfill promises to its research and development partner, General Poly, and substantially contributed to the company’s demise.

The jury assessed $10.3 million in actual damages and $60 million in punitive damages. The judgment will accumulate interest at 9% while the verdict is on appeal.

Brent Brown, an attorney representing General Poly’s bankruptcy trustee, said a probable reason for the large verdict was the determination that Allied withheld raw material from General Poly while selling it to General Poly’s competitors.

During the civil jury trial in U.S. District Court in Wichita before Judge Patrick Kelly, lawyers for General Poly presented thousands of exhibits and a parade of witnesses trying to prove that Allied’s actions forced the Olathe, Kan., company out of business in 1981.

General Poly was founded in 1979 to make high-density, non-stretch plastic bags used primarily by retail merchants.