Judge confirms Ziebart ruling as it loses COO

Ziebart International Corp. lost its COO this month and suffered another setback in its legal battle with franchisees.

John Lynch, who also was treasurer of the Troy-based rust-proofing and auto accessory company, resigned last week to become chairman and CEO of Automotive Franchise Systems L.L.C. in Detroit.

Lynch did not return a call from Crain’s last week. He is the fourth senior executive in the past five years to leave Ziebart for a more senior spot, said Thomas Wolfe, president and CEO of Ziebart.

“I was very sad to see John go, but I can’t knock him,” Wolfe said. “I’m just tired of losing people. He’s moved up, and I’m happy for him.”

Ziebart International had systemwide revenue of $155 million in 2002. It has about 550 locations in 44 countries.

Wayne County Circuit Judge John Gillis Jr. on Dec. 5 confirmed an arbitrator’s ruling that found Ziebart had violated franchise agreements, including overcharging them for proprietary materials.

The arbitrator awarded the franchisees $1.4 million and ordered the company to make several changes in its relationship with franchisees.

While confirming the arbitrator’s ruling, Gillis ordered the lawyers for both sides to “clean up some language” in the ruling and return it to him, according to Norman Yatooma, president of Birmingham-based law firm Norman Yatooma & Associates P.C., which is representing the franchisees.

“I’ve never had that happen before, he said. “It has been a very adversarial process, and it will be difficult, but we’ll get it done.”

Yatooma expected the final ruling to be accepted by Gillis by Dec. 26. Ziebart will then have 30 days to pay the $1.4 million. Wolfe said the company is prepared to pay as soon as the ruling is finalized.