Garwood Packaging Co v. Allen & Co., Inc.

378 F.3d 689 (7th Cir. 2004)

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Nature of the Case

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Facts

Garwood Packaging, Inc., (P) created a packaging system designed to increase the shelf life of fresh meat. P failed in marketing its food-packaging system and had run up debts of $3 million and was broke. It engaged Martin to help find investors. Martin told P that D (Martin's employer, remember) would consider investing $2 million of its own money in P if another investor could be found who would make a comparable investment. Martin located Hobart Corporation that was prepared to manufacture $2 million worth of GPI packaging machines in return for equity in the company. The deal was hung up on the equity share and subordination from creditors. Martin promised P that the he would see the deal through come hell or high water. Eventually, D decided not to invest, the deal collapsed, and P was forced to declare bankruptcy. To further reduce its risk D had decided to off-load half its projected $2 million investment on other investors but those investors got cold feet, and that was the reason D withdrew. No contract had been signed, and no agreement had been reached on how much stock either D or Hobart would receive in exchange for their contributions to P. Nor had releases been obtained from the creditors. P sued based on promissory estoppel. The court granted D’s motion for summary judgment and P appealed.