MEI Solutions.com, Inc., a provider of systems for grocery stores, will close its doors within the next few days in the wake of a bitter contract dispute with software provider Professional Access Ltd. (PAL).
PAL filed suit three weeks ago, alleging that MEI owes it roughly $318,000 from a software installation performed earlier this year.
But MEI’s CEO, John Molloy, claimed in an interview that the system installed by PAL “never worked.” This failure cost MAI $30 million in potential sales, he said.
MEI plans to answer the suit in the near future, Molloy added.
Spokane, WA-based MEI owes roughly $15 million to a secured creditor, but it will probably close without filing for bankruptcy protection, according to Molloy. Roughly 12 employees will lose their jobs.
According to work orders on file with the court, MEI Solutions planned to implement “an n-tier Web-based transaction warehouse application for merchants, acquirers, and end-users or online customers.”
New York-based PAL was to design the user interface and system architecture for MEI. Molloy described it as “our next generation of back-office software.”
PAL said in its complaint that, “As is common when integrating software components, MEI experienced certain bugs, or software compatibility glitches.” But the papers continue that PAL fixed the glitches “without charging any fees or costs to MEI.”
Of total bills of $418,000, MEI paid $95,000 for consulting services and $4,700 for expenses, but has failed to pay the balance, the complaint alleges.
Molloy argued that the complaint contradicts itself on the amount owed.
PAL’s attorneys were unavailable for comment at deadline.
Founded roughly 17 years ago, MEI provides systems of use in managing inventory and pricing. The firm generates from $4 million to $5 million in sales per year, Molloy said.
The case is on file with the U.S. District Court for the Southern District of New York.
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