ADT Takes Legal Action to Recoup Millions From Alarm Protection Settlement
ADT is suing to recoup $2 million owed by Adam Schanz, owner of Alder Holdings and various subsidiaries of Alarm Protection that was agreed upon in a 2017 settlement.
ADT filed a complaint on Sept. 20 in the U.S. District Court for the Southern District of Florida, Palm Beach Division, against Adam D. Schanz, owner of Orem, Utah-based Alder Holdings and various subsidiaries of Alarm Protection.
According to the complaint, Schanz and his companies had to pay $2 million by Sept. 1 as part of a settlement reached in May 1017. Schanz also needed to give ADT a security interest in 1,500 customer accounts and other collateral.
This latest litigation stems from a 2015 lawsuit (ADT LLC v. Alarm Protection LLC; No. 9:15-cv-80073) in which ADT sued three security companies for an injunction to stop the defendants from making false claims of affiliation in the sale of alarm services to ADT’s customers, a practice known as “slamming.”
According to court documents, ADT also sued for damages to compensate for its losses caused by deceptive sales practices. The nation’s largest residential security provider reached settlements with Schanz and Alder, along with two Monitronics dealers, Alliance Security of Cranston, R.I., and Capital Connect of Tucson, Ariz.
The agreements called for ADT to receive $3 million from Schanz, $1.5 million from Alliance Security and $1 million from Capital Connect. The settlements also prohibited each company from employing further deceptive sales practices, according to court documents.
Schanz paid ADT the initial $1 million payment owed in 2017; however, ADT claims the defendant has since breached each of the settlement’s other terms. The outstanding terms include $2 million, plus interest, owed by Sept. 1. ADT claims that Schanz has ignored the request for payment and has refused to give ADT a promised personal guarantee.
ADT’s complaint also claims Schanz has not signed a promissory note, nor given ADT a security interest in the customer accounts. Also, he has allegedly refused to provide ADT with complete copies of the contracts offered as collateral, among other conditions outlined in the May 2017 settlement.
ADT has asked the court to determine its rights against the defendants apart from contempt sanctions.
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!