A jury in Santa Rosa, Calif., awarded $21 million to a snack company that went bankrupt because a machinery supplier repeatedly failed to come up with a machine to commercialize its product.
Smashmallow, a Sonoma Brands portfolio company, created its eponymous snackable marshmallows, a product that was unique to the American market, in 2016. It contracted with Dutch food machine builder Tanis Food Tec to build a machine to scale up its marshmallow production, according to BraunHagey & Borden, the law firm that represented Smashmallow.
“Smashmallow paid the defendant millions of dollars, but the machine was defective and unsafe,” said the law firm. “After years of work and hundreds of thousands of dollars of repairs, the machine still could not make marshmallows to Smashmallow’s specifications, and Smashmallow had no choice but to wind down its operations.”
Smashmallow sued the machine manufacturer and -- two years after filing and following a six-week trial -- was awarded the damages on Oct. 20.
