Former franchise owners fight back

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Nelke van Aspert, former CEO of Power Plate ME.

Two Dubai-based entrepreneurs who lost their business "without good reason" could net up to US$36.1m in damages if they win their upcoming court case, Arabian Business can exclusively reveal.

In 2004 Nelke van Aspert and her partner Frans Giezen bought the rights to distribute fitness brand Power Plate to the Arab market and have since sold 650 machines worth up to US$10,800 each.

It was the issuing of a contract last spring however, which brought an abrupt end to the Dutch couple's flourishing business.

Power Plate International (PPI) had been taken over by US private equity investor J.H.Whitney and Co and the couple were due to sign a new, updated contract. After a Dubai law firm found the contract to contain five clauses that were illegal under UAE law, van Aspert and Giezen refused to sign and, in October 2006, PPI cancelled their current contract. Having helped them win four summary cases in the Dutch courts to date, lawyer Marielle Koppenol-Laforce, of law firm Houthoff Buruma, said she was confident the pair would receive a large compensation payout.

"We have asked for €27m (US$36.1m). We are absolutely confident that we will win the case and we will certainly get awarded damages," she told Arabian Business.

The case against PPI, to be held in the Dutch courts in June, follows four summary cases all won in favour of van Aspert and Giezen. As well as two rulings halting legal proceedings raised by PPI against the couple in Dubai, PPI was ordered to pay van Aspert and Giezen €500,000 (US$665,000) on February 1st and then €20,000 (US$26,500) every month up to a total value of €900,000 (US$1.2m). No payments have been made to date, however, and the courts have blocked PPI's and its Dutch director's assets.

Van Aspert alleges that the company has not heeded the ruling of the Dutch court. "We have blocked their assets and so they shouldn't be able to sell them [but] they have sold 12 new Power Plate machines with an approximate combined value €144,000, even with the court order," she said.

According to Dutch law, this is a criminal offence.

Revealing to Arabian Business that she has "very strong" evidence against PPI, van Aspert maintained that she is confident of winning the case.

"We've been wronged. We've done all the hard, groundbreaking, work and now that we finally could've reaped the rewards, Power Plate International pulls the plug using lies to do so," she said. "This is unacceptable, we've had to fire 22 employees. But we're very confident in the Dutch legal system and we'll keep defending our rights," she added. "PPI will think better of it soon because we intend to fight until the bitter end," added Giezen.

Meanwhile, in the Netherlands, there is increasing concern among politicians, unions and businesses over the threat posed by buy-out groups and hedge funds according to the UK's Financial Times newspaper. Next month a number of parties related to the growing controversy over shareholder activism in the Netherlands will address a Dutch parliamentary committee about hedge fund and private equity activity. The representatives will include those from Stork - the Dutch industrial group that faces being split-up after two separate hedge funds gained participating interest in the company. Warning of the dangers of dealing with hedge funds and private equity investors, Giezen said: "It's not just the big fish like Stork who are victimised. Let us be an example of how it can happen to the smaller entrepreneur too."

In Dubai, PPI has appointed Al Kamda General Trading - whose current UAE-based health and fitness portfolio includes the Nautilus, Bowflex and Startrac brands - as the new UAE Power Plate distributor. According to CEO Reg Cox, the company is planning a "high-profile re-launch" of the brand. "A comprehensive market launch plan is already in place, to be rolled out in the near future," said Cox.

Van Aspert and Giezen claim to have been approached by a number of Power Plate's rival companies to spearhead their operations in the region.

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