The Green Sheet Online Edition
August 13, 2007 • Issue 07:08:01
TMS, AMS settle their grudge
In January 2007, a budding alliance among merchant
acquirers began to unravel when Total Merchant
Services and Advanced Merchant Services brought
suit against one another in the Second Judicial
District Court in Denver. Six months later, the parties
reached an amicable out-of-court settlement.
TMS President and Chief Executive Officer Ed Freedman
announced the alliance's formation at a sales meeting
in 2005. The group included TMS, AMS, Money Tree
Merchant Services and CardReady International.
Hailed as an innovative approach to growth, members
were free to distinguish themselves through individual
sales programs while enjoying the efficiencies of shared
back-office functions at TMS' Colorado headquarters.
Over time, the limited, nonexclusive relationship between
TMS and AMS soured. And when TMS sought a new,
exclusive agreement, AMS refused. Claims and counterclaims
Under the terms of the binding resolution, TMS will pay
AMS amounts due or becoming due under pre-existing
sales and residual release agreements. TMS will also stop
accepting new business and marketing under AMS' name
by Oct. 1, 2007.
AMS agreed to drop its claims against TMS and to
pay amounts due to TMS resulting from reprogramming
of certain merchant accounts. AMS also confirmed its
nonsolicitation obligations regarding merchants boarded
under the "Advanced Merchant Services" program
operated by TMS.
The agreement ends a battle that was closely watched
throughout the industry.
"We are very pleased with the results of the settlement
to this litigation," Matt Freedman, TMS Chief Operating
Officer, said. "And we are very happy to have achieved an
amicable end to this situation."
Jason Felts, President of AMS, said that while the settlement
was not perfect, it was a resolution "that all could
at least accept and move it out of the courts," allowing
everyone to move forward.
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