We entered into a contract
to have a food product co-packaged for our company. The co-packing company is in Utah. We put an initial deposit down of $16k.
Short story: They kept telling us we were in line to be produced. Then when the time came, they would bump us back. In the end, we were told we would be produced on Dec 9-14. Then a week before our production date, they had to bump us to an undetermined time in Jan. Initially they told us that it was because they could not get our cartons in time. We called the carton manufactur and they said it would not be a problem. We then told the co-packer that we could get the cartons for them.... They then told us they still could not put us on the line, because somebody else was already in scheduled for that time. (we were originally supposed to be scheduled for that time)
Basically we feel that because we are a small new company, they kept giving our production slot to a bigger company.
In Dec, After we got bumped to Jan, we termanited our agreement with the company to package. We went to the packer and picked up our ingredients and asked for a return of our funds. They said we could not have them today, but it they would send them to us next week.
At the end of two weeks, they told us they could not pay us until Jan because they had to reconcile the books. Then in Jan they told us they needed until Feb to pay us because they still werent done with reconciling the books.
Of note: When we termintated our agreement, the company told us they were glad we were leaving, and they did not like working with us.
We have since heard rumers that the co-packing company is in financial trouble. We are wondering if they took our deposit to pay for another company's bill. Also we feel that when they said they could not get cartons, it was because they did not have the funds to pay their bill there. (no evidence other than we have heard the carton manufactures saying they arent being paid).
So it is February and we have yet to see our money back. What recourse do we have? I have done some reading and wonder if we could sue them for fraud? (selling or collecting deposits for something they were unable to deliver)