University Loft pays $400,000 settlement

Company disputes claims, but decides to settle

Thomas Russell -- Furniture Today, June 30, 2009

WASHINGTON — Contract living room and bedroom furniture specialist University Loft has agreed to pay the U.S. government $400,000 as part of a settlement announced this week.

The settlement stemmed from a suit filed by competitor Furniture by Thurston alleging that University Loft sold Malaysian-made furniture to the government in violation of the Trade Agreements Act.

Furniture by Thurston will receive a $66,000 share of the settlement under the False Claims Act. This allows private citizens to file suit on behalf of the government and share in recovery proceeds.

Indianapolis-based University Loft disputed the claims and admitted no wrongdoing in the case. In a statement, the company said it decided it was more cost-effective to settle rather than litigating the case.

University Loft said the main issue in the case was whether it was allowed to ship furniture directly from Malaysia to overseas U.S. military bases. It said that government contracting officials authorized it to ship the goods directly from Malaysia, which would in turn save the government hundreds of thousands of dollars in shipping costs.

However, the Department of Justice determined this was still not permitted under the Trade Agreements Act.

In a statement, company owner James Jannetides said, "The most frustrating thing about this case was that it distracted us from serving our customers. Moreover, given the potential high cost of protracted litigation against the DOJ, it was prudent to get this behind us in spite of the merits of the case. We look forward to continued good relations with our government customers."