May 30, 2008

U.S. District Court: Radko not Reponsible for Rauch Debts in ‘Elmet’ Case

CHARLOTTE, NC – U.S. District Judge Graham Mullen has rejected a legal attempt to make famous Christmas ornament designer Christopher Radko pay off nearly $2.5 million in promissory notes from Rauch Industries, Inc. to pay three of its vendors.

The complicated case – separate from the main court case involving Radko and Rauch – involved a contention that Mr. Radko was somehow responsible for repayment of promissory notes signed by Rauch in favor of three vendors, Elmet Technologies, Inc., Watauga Opportunities, Inc. and Complete Design & Packaging, LLC. Rauch incurred the debt before Mr. Radko sold his ornament company to Rauch in March 2005.

Judge Mullen’s denial of this attempt means that Rauch is responsible for paying the debt reflected by the promissory notes it signed with Elmet and the other vendors.

“These creditors were clearly trying to blame Chris for Rauch’s inability to pay its debts,” according to Michael G. Wimer, the Asheville, N.C. attorney who represented Mr. Radko in the case. “It was clear that the case involved a pre-existing debt and promissory notes that have nothing to do with Mr. Radko. The Judge took note of the fact that the executive in charge of Elmet is also on the board of Rauch. We’ve been saying all along this was an effort by Rauch to retaliate against Chris Radko for his refusal to settle claims Rauch has been making. Clearly, the judge agreed the case was without merit.”

The so-called “Elmet” case was heard in the same U.S. District Court that is considering a broader case, in which Rauch and Mr. Radko are suing each other over the management of the Christmas ornament business Rauch acquired from Mr. Radko in 2005. Mr. Radko alleges numerous violations by Rauch including securities fraud, fraudulent concealment, breach of contract, conversion of his personal assets, wrongful termination and unjust enrichment.

About Christopher Radko
Christopher Radko is an iconic name in American home d