Milchem, Inc. Wins Settlement for Defective Machinery

June 28th, 2010

Milchem, a Baker-Hughes subsidiary, sued National Electric Coil Division of McGraw-Edison over the purchase of a used wound electric motor, which ran a large barite-grinding mill. Offshore drilling operations require Barite for production. The wound motor malfunctioned, damaging the grinding mill and preventing Milchem’s barite from being ground and sold. Milchem demanded damages for motor replacement and their lost profits.

Numerous complex technical depositions concerning the winding of electric motors (which are no longer in common use) were presented. The defendant gave the plaintiff incorrect advice on how to wind the motor based on information it had received from an advisory service. Plaintiff’s counsel built a complex financial model demonstrating the loss of profits from their inability to sell barite when production was halted. National Electric settled for a significant sum prior to trial.

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