Dahon take Tern to court in battle over folding bikes

By BikeRadar, UK | Thursday, July 21, 2011 2.00pm

Dahon are taking new folding bike rivals Tern to court, with CEO David Hon accusing the founders of the fledgling business – his son Joshua and estranged wife Florence – of "unlawfully using company assets, resources and intellectual property to start a competing company".

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A lawsuit filed at the US District Court in Duarte, California today accuses Florence – the ex-CEO of Dahon Taiwan – and Josh – former vice president of sales and marketing at Dahon North America, the parent company – of breach of fiduciary duty, unfair competition, and conversion and accounting offences. It calls for a jury trial and demands "compensatory and punitive damages, restitution, and temporary and permanent injunctive relief".

In a press release, Dahon stated: "[We] sued Joshua Hon and Florence Hon for wrongfully seizing control of Dahon’s Taiwan subsidiary (Dahon and Hon Industrial Labs) and related intellectual property, including the Biologic brand and the dahon.com website, and for using those assets and property to unfairly compete with Dahon. In addition, since Joshua and Florence Hon started competing with Dahon while officers and employees of Dahon, they've acted in breach of their fiduciary duties owed to Dahon and to Dahon’s shareholders."

The court papers, which can be viewed here, claim that the pair tried to take over Dahon and when that failed, annexed its Taiwanese subsidiary and formed a rival company. The documents say they simultaneously tried to undermine Dahon by spreading misinformation, including rumours that the company's Chinese subsidiary was on the brink of bankruptcy.

At time of publication, no response to the allegations had been received from Tern Bicycles or their parent company, Mobility Holdings Ltd. [A response has now been received and you can read it here ed.]

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