Finance

Park Lawn lawsuit alleges trade secret irregularities

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This article published last week from Bloomberg Law alleges that when former Park Lawn Corporation CEO Andrew Clark resigned and left the employment of the company he carried trade secrets with him to his new employer, Plot Box, Inc.

The article from Bloomberg Law notes that a lawsuit was filed in a Delaware federal court on October 30, 2020.  Here’s what that article says, “the company (Park Lawn Corporation) said rival PlotBox, Inc. induced Andrew Clark to violate nondisclosure and noncompete agreements he signed before resigning as Park Lawn’s CEO and chairman earlier this year. PlotBox, which seeks to sell management software to funeral homes and cemeteries, made Clark its chairman in June.

Bloomberg goes on to say that Park Lawn Corporation has invested over $1 million to develop a proprietary software for cemetery management called “FaCTS”.  It is this software that Park Lawn had planned to use internally and eventually sell to others in the industry that may be at the root of the lawsuit.

Park Lawn is quoted in the Bloomberg article as saying the following, “PlotBox has willfully and maliciously misappropriated PLC’s trade secrets by acquiring them through improper means by inducing Mr. Clark [to] disclose those secrets to undercut PLC’s development of its software. . . . . . FaCTS software “includes proprietary features concerning records management, deed management, property management, contract management, accounting reconciliation and customer interface.  PlotBox is “developing and marketing an industry-specific software technology tool that competes against FaCTS.”

Park Lawn also alleges that a non-compete agreement bars Mr. Clark from working for PlotBox in any capacity through August 31, 2021.

Funeral Director Daily take:  My first thought on this lawsuit was that this is truly an international dispute.  I believe that PlotBox was founded in Northern Ireland and now has United States offices and operations and Park Lawn Corporation has its international headquarters in Toronto, Canada, although it is also incorporated in the State of Delaware and has operations across the United States.  I have no idea on how those facts bear on the case, but I just find it interesting.

Andrew Clark

At Funeral Director Daily we do not look to or intend to “break news”.  Our philosophy is to take published news from the death care industry and disseminate that news that we feel relevant to our readers, sometimes with our opinion on that news included under “Funeral Director Daily take”.

One of the areas that we really try to break down is the financial news of the public companies.  I’ve mentioned before that I always followed that news and even read the fine print to learn as much as I could about what was happening in our profession on a financial scale.  And, I’ve told you that over my career, because of that knowledge, I’ve always believed that I created extra value for my funeral home and also was aware of exactly what it might be worth on the open market.

I tell you that — we are not a breaking news entity and my readership of the fine print of the corporate financial reports – because when Mr. Andrew Clark resigned from Park Lawn Corporation last May, I questioned the motives behind such – but kept them to myself.  Here’s what was written in the Park Lawn Corporation 1Q 2020 report buried on Page 30 on the Other Income (Expenses) portion of the report:

“In addition, there are costs relating to the transition of Mr. Clark of approximately $1.7 million
(notwithstanding the terms of Mr. Clark’s employment agreement): . . . . which included
• the payment of approximately $93,000 in legal expenses incurred by Mr. Clark in connection with
his departure and other consideration valued in the amount of approximately $207,000.
On May 10, 2020, the Company and Mr. Clark entered an agreement resulting in the Company having no
further financial obligations to Mr. Clark. On May 12, 2020, Andrew Clark resigned from the Board of
Directors.”

From my point of view, when I saw that included in the 1Q 2020 report, the payment of legal expenses stood out to me.  I wondered, “why would Mr. Clark incur legal expenses of $93,000 “in connection with his departure” while working for the company?”  I don’t know the answer, but it did make me wonder if his departure had more to it than just a departure.

Related News of Park Lawn Corporation – 3Q Earnings Expectations – Park Lawn Corporation is expected to report 3rd Quarter 2020 earnings this week.  Last week we noticed a short article on Stockhouse, that you can see here, anticipating that report.  Here are some direct quotes from that article:

“In our view, all signs are pointing to another strong quarter for Park Lawn”

“. . .we believe a positive Q3/20 outlook is further supported by U.S. CDC data on excess deaths, with total deaths in the U.S. in Q3/20 ~16% above expected levels.”

“We believe robust organic growth could carry into H1/21. We believe at- need volumes could remain elevated, particularly against a backdrop of rising COVID-19 case counts, while pre-need cemetery sales have been benefiting from increased leads due to the higher at-need volumes and with COVID-19 serving as a triggering event for individuals to evaluate post-death alternatives.”

“We continue to view Park Lawn as a high-quality company in a recession-resistant business with a favourable industry backdrop (including demographic tailwinds), a strong near- and medium-term outlook, ample opportunities for growth through M&A in its highly fragmented industry, and a justifiable valuation.”

News and Information from the world of Death Care:

Webinar:  From Cremation Association of North America (CANA) and Passages.  This webinar is entitled “Raise your level of Service:  Creating value and increasing revenue”.  The brochure mentions that this webinar will help you in delivering value to families and ultimately increase cremation revenue.  This is a timely reminder as this webinar is today at 2 pm Eastern Time and 1 pm Central Time.  You may qualify for one hour of CEU credit from the Academy of Funeral Service Practice.

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