Bridgestone/Firestone and Hempstead Tire Service Inc. have settled a lawsuit in which the tire maker had charged the West Hempstead, N.Y., dealership with wrongfully collecting profits and commissions on the sale of BFS tires.
The two companies settled for undisclosed terms Nov. 17, and both declined to comment.
BFS had filed suit Aug. 19 against Hempstead Tire in the Supreme Court of New York in Nassau County for approximately $4.5 million-the balance on Hempstead Tire's open account, plus interest, attorney's fees and commissions it claimed the dealership withheld.
BFS also had alleged that Hempstead Tire had failed to pay federal excise taxes by reporting that tire sales to non-government customers were actually sales to local municipalities.
The suit alleged Hempstead Tire had filed receipts of tire sales to municipal governments on Long Island, N.Y., but that BFS later discovered those sales were never made to the government entities.
BFS charged that the dealership sold tires to non-governmental customers without the tire maker's knowledge. It terminated its authorized dealer agreement with Hempstead Tire on Aug. 2.
Shortly after filing the suit, BFS exercised an option in its security agreement with Hempstead Tire to seize inventory, not yet paid for, from the dealership ``without demand or notice.''
The suit named Hempstead Tire owners Mike and Ivy Chazen as defendants as well as all their affiliates and instrumentalities.
Mr. Chazen declined to comment on the suit or the settlement, and his attorney did not return phone calls.