Boston, MA 06/17/2014 (wallstreetpr) – J.C. Penney Company, Inc. (NYSE:JCP) suffered a setback on Monday after a New York judge passed verdict against the retailer in Macy’s, Inc. (NYSE:M) and Martha Stewart Living case. Resultantly, shares of the retailer entered red in after hours trading. According to the Judge, J.C. Penney’s contract with Martha Stewart Living interfered with the latter’s arrangement with Macy’s.
Financial Consequences Pending
Based on the circumstances and proofs, Justice Jeffrey Oing ruled that J.C. Penney is violated the exclusive agreement but did not specify the exact damages that it is liable to pay to Macy’s. While declining punitive damages to Macy’s, Oing ordered the financial consequences to be evaluated by a special judicial officer or referee. On settlement of those issues, the long running battle is expected to finally conclude.
Martha & Macy’s Sorted Out Differences
The dispute stemmed from an agreement that took place in December 2011 between J.C. Penney and Martha Stewart Living. As per the agreement, J.C. Penney decided to sell a range of Martha’s home products across its stores. Later on, Macy’s filed a lawsuit against the two companies stating that their arrangement breaches its operating agreement with Martha to exclusively sell its housewares. With the pending litigation running on, Martha Stewart living amicable sorted out its differences with Macy’s during the beginning of the year, leaving the legal case open for J.C. Penney.
In the meanwhile, the retailer did its best to come out of the legal battle as it revised its original agreement with Martha, during last October, discarding exclusive products that were on Macy’s list. But, yesterday’s ruling failed the efforts made by the company.
The company’s representatives turned down the request to comment on the ruling, while it issued a statement mentioning the judgement as disappointing. Moreover, J.C. Penney Company, Inc. (NYSE:JCP) indicated that it might go for an appeal and affirmed strongly that it will defend itself in case of any monetary damages.