Real Estate Disposition Corporation Sued for $132 Million Over Anti-Competitive Trade Practices
ORANGE COUNTY, Calif. – National Home Auction Corporation (NHA), a company specializing in the marketing and auction-style sale of lender foreclosed properties, has filed a lawsuit in Orange County Superior Court against Real Estate Disposition Corporation (REDC) for trade libel, unfair competition and intentional interference with contract and prospective economic advantage. (Orange County Superior Court Case No. 30-2009-00180143-CU-BT-CXC.) The suit alleges that REDC intentionally drove NHA out of the distressed properties auction business and seeks more than $132,000,000 in compensatory damages, as well as punitive damages.
NHA and REDC were direct competitors in the distressed properties auction business. The founders of NHA had identified the coming wave of home foreclosures in the United States and anticipated the extreme slow-down in national residential real property sales that has since occurred. They formed NHA to work closely with asset sellers to enable them to sell their properties through well-publicized and professionally-conducted real property auctions. NHA's business model was very well received and almost immediately NHA was able to negotiate extremely lucrative contracts with asset sellers and conduct successful auctions, thereby posing a serious competitive threat to REDC.
As the suit alleges, not satisfied with fair competition in the marketplace, REDC undertook unlawful, unfair and fraudulent actions that were designed to, and did, put NHA out of business. As further alleged, in written and telephonic campaigns directed at asset sellers throughout the country, REDC falsely represented that NHA was engaging in illegal activity in connection with its auctions, that a restraining order had been entered against NHA that prohibited it from conducting auctions, that the FTC was investigating it and that asset sellers risked having consumers "rescind each and every purchase agreement" concluded through an NHA auction. The suit asserts that as a result of these statements by REDC, asset sellers pulled their properties from NHA auctions and refused to conduct business with NHA.