Advanced Merchant Services Inititates Litigation Against Total Merchant Services

In a Complaint filed in District Court, City and County of Denver, State of Colorado, Case Number 2007-CV-513, DIV 3, AMS contends that TMS has breached several contracts, violated a number of covenants contained in their business agreement and has failed to pay hundreds of thousands of dollars in currently due commissions as well as other monetary earnings totaling in the millions.  A copy of the complete Complaint is now a matter of public record in Denver. According to the complaint, in January 2004, AMS and TMS entered into a limited sales representation agreement by which AMS’ sales force would sell TMS’ bankcard processing services and equipment.  By March of 2004, the two parties began negotiating a new agreement on compensation.  Both parties agreed the contract would be a non-exclusive arrangement, allowing AMS to retain the right to sell processing services on behalf of other institutions as well.  The Complaint further alleges that the business agreement also precluded TMS from circumventing AMS by recruiting AMS sales staff. According to the Complaint, over time, AMS became dissatisfied with the customer service and technical support provided by TMS.  With that in mind, when TMS approached AMS wanting an exclusive arrangement with AMS salespeople, AMS refused.  The Complaint alleges that when AMS refused to renew the agreement, TMS launched an “unlawful and bad faith scheme targeted at AMS and the Felts family.” According to the Complaint, that scheme included TMS fabricating breaches of contracts in order to stop paying AMS and seeking to destroy AMS’s reputation and interfering with its current and future business relationships. Additionally, according to the allegations in the Complaint, TMS launched a compensation and incentive program only for sales people who worked with AMS in order to circumvent the AMS relationship and try to put AMS out of business. “Prior to filing suit, we tried on numerous occasions to resolve this dispute amicably, but to no avail,” says Jason Felts, President/CEO of AMS.  “They left us with no other choice but to take this matter to court and legitimately pursue and protect our rights.” Additionally, one of the claims alleged in the Complaint involves the unauthorized usage of AMS’ name and logo.  The Complaint alleges that under the terms of its agreement with TMS, AMS gave permission to use the company’s name only as long as business agreements between AMS and TMS were in place.  The Complaint alleges that since the termination of those agreements, TMS is still using AMS’ name and logo.  AMS feels strongly that this is one of the more serious aspects of the dispute creating marketplace confusion. Felts said: “Fortunately, through cash reserves and adequate financing, AMS has those resources. We are moving our business into a new realm of success by securing an independent, non shared BIN / ICA and we are committed to bringing this dispute to a positive and desirable end.  I am committed to preserving my good name, that of my company and the fantastic business we have developed over the past 10 years. We have always operated our business with the highest levels of honesty and integrity.  We feel confident that when the facts of this case, contracts and claims are reviewed by a jury of our peers, our relationships with our sales partners, our integrity, good contract and strong reputation will allow us to prevail. The team of litigators are working hard to resolve this matter, while I along with my family and company conti