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Color-Web Launches Lawsuit Against Bank

February 24, 2012
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NEW YORK—Color-Web Inc., a division of 1800Postcards.com, released details of ongoing litigation against its bank. Color-Web has counter-sued People’s Capital and Leasing, a unit of People’s United Financial, alleging fraud and breach of contract. The amount of the claim is $13.8 million.

Color-Web alleges that People’s Capital and Leasing  reneged on a financial commitment to provide almost $4 million in funding for new technology—a state-of-the-art, custom-built printing press—in 2007. The bank provided a $200,000 deposit at that time, the suit alleges. Upon receiving this commitment, Color-Web changed its business operations to accommodate the new technology. The company contends the bank then withdrew the financing as other printing businesses began to suffer financially. Color-Web maintains the move was in violation of the agreement.

“It is important to note that, in my estimation, the decision to pull back the financing in question was not related to the business performance of Color-Web,” explained David Moyal, president of Color-Web.

Because the strategic business changes that it made were not quickly reversible, Color-Web believes it experienced material loss as a result of the bank’s decision to pull the financing. Color-Web has had to lay off nearly 100 workers in the New York Metro area since the funding was pulled. The company is currently exploring closure.
 
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