Whirlpool Ordered to Pay $581 million

posted on:
May 11, 1999

author:
Staff

category:
Fraud

Benton Harbor, Mich., May 10 (Bloomberg News)- The Whirlpool Corporation, the largest United States appliance maker, was ordered to pay $581 million by an Alabama jury that said three people who bought satellite television dishes were mislead over a credit agreement with the company’s former finance unit.

The circuit court jury in Hale County, Ala., awarded $975,000 in compensatory damages on Friday. Whirlpool said today that it would appeal the verdicts over the claims, which total $2,000.

The award will probably be reduced, said Tom Methvin, the plaintiffs’ attorney, who had sought $6.9 million in damages. The jury wanted to focus attention on the state’s poor and uneducated consumers and the lack of laws protecting shoppers, he said.

Whirlpool, based in Benton Harbor, said it expected to prevail in post-trial proceedings and through appeals. The verdicts are “totally without merit and represent a gross miscarriage of justice,” the company said in a statement. Whirlpool shares rose $1. 0625 to $70.

Whirlpool makes large appliances such as washing machines and refrigerators under brands including Whirlpool, Kenmore and Kitchenaide. It sold the finance subsidiary, Whirlpool Financial National Bank, to the Transamerica Corporation in 1998, though the appliance company said it would be responsible for any liability.

The lawsuit was filed September 1997 by Barbara Carlisle and her parents, George and Velma Merriweather, who brought the satellite equipment through a door-to-door salesman from a local retailer called Gulf Coast Electronics.

Whirlpool charged $1,100 for each of the satellite dishes, which retailed at the time for about $199, and then charged 22 percent interest, Mr. Methvin said. The sales representative for Gulf Coast told the plaintiffs they could pay off the contract in three years when he actually took four and a half, he said.

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