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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TEXAS

SHERMAN DIVISION

L.O.D.C. GROUP, LTD. §

§

v. § Civil Action No. 4:23cv691

§ Judge Mazzant

SYNERGY CHC CORP and §

JACK ROSS

PLAINTIFF’S SECOND AMENDED COMPLAINT

Plaintiff, L.O.D.C. Group, Ltd., (“Lily”), files its Second Amended Complaint against 

Defendants Synergy CHC Corp (“Synergy”) and Jack Ross (“Ross”), and states:

I. PRELIMINARY STATEMENT

1. Lily is a private label manufacturer of nutritional supplements and personal care 

products. Between March 25, 2020, and May 26, 2020, Synergy issued a series of purchase 

orders to Lily seeking to purchase 15 million bottles of hand sanitizer at a total cost of nearly $11 

million. Ultimately, Lily delivered to Synergy approximately 8.5 million bottles of hand 

sanitizer. However, Synergy instructed Lily to stop production in September 2020, thereby 

breaching the agreement between the parties. Additionally, Synergy induced Lily to 

manufacture additional products for Synergy with false assurances of prompt payment. Lily 

manufactured and delivered the goods which Synergy accepted and Synergy has refused to pay 

for them. Accordingly, Lily has been forced to file this action to recover its damages.

II. PARTIES

2. L.O.D.C. Group, Ltd. Lily is a Texas limited partnership with its principal place 

of business located in Denton County, Texas. Lily has three limited partners, each of whom is a 

natural person and each of whom is a resident and citizen of Texas. Lily’s sole general partner 

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is a Texas corporation with its principal place of business in Texas. Accordingly, for diversity 

purposes, Lily is a citizen of Texas.

3. Synergy CHC Corp. Synergy is a Nevada corporation with its principal place of 

business in Maine. Accordingly, for diversity purposes, Synergy is a citizen of both Nevada 

and Maine.

4. Ross is an individual resident and citizen of Maine. Ross may be served with 

summons at 865 Spring Street, Westbrook, Maine 04092.

III. JURISDICTION AND VENUE

5. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 

1332 as the parties are of diverse citizenship and the amount in controversy exceeds $75,000.00.

6. This Court has personal jurisdiction over Synergy pursuant to the Texas Long 

Arm statute, Tex. Civ. Prac. & Rem. Code § 17.042, et seq. because Synergy entered into a 

contract with Lily, a Texas resident, and either party was to perform the contract in whole or in 

part in Texas.

7. This Court has personal jurisdiction over Ross pursuant to the Texas Long Arm 

statute, Tex. Civ. Prac. & Rem. Code § 17.042, et seq. because Ross committed a tort in whole 

or in part in Texas by the fraudulent conduct set forth below.

8. Venue is proper in this Court pursuant to 28 U.S.C. § 1446(a) in that: (i) Lily 

originally filed this action in the Denton County, Texas District Court; and (ii) this is the district 

court of the United States for the district and division within which this action was pending.

IV. APPLICABLE FACTS

9. Lily is a manufacturer of nutritional supplements and foods. In early 2020, Lily 

took steps to produce hand sanitizer in response to the demand caused by the Covid-19 

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pandemic. At that time, Synergy approached Lily about placing several large orders for hand 

sanitizer. On March 25, 2020, Synergy issued a purchase order to Lily for 1,000,000 2-ounce 

bottles of hand sanitizer. Thereafter, between April 8, 2020, and May 26, 2020, Synergy issued 

five additional purchase orders totaling an additional 14 million 2-ounce bottles of hand 

sanitizer. 

10. Synergy informed Lily it had demand for millions of bottles of hand sanitizer per 

month. However, due to the Covid-19 pandemic, components for hand sanitizer production were 

in short supply. In order to acquire the necessary components to meet Synergy’s stated demand, 

Lily would be required to make substantial commitments to its vendors. Accordingly, Lily 

required Synergy to place purchase orders before Lily would commit to acquire the needed 

components. Additionally, Lily informed Synergy that, due to supply chain issues and 

manufacturing capacities, Lily could not guarantee a delivery schedule and that delivery would 

occur on a rolling basis. Synergy was informed and knew that Lily was acquiring the necessary 

raw materials and packaging supplies required to fill the orders.

11. All went well for a while. Between May and August 2020, Lily manufactured 

over 8.5 million bottles of hand sanitizer for Synergy. However, on September 1, 2020, Synergy 

instructed Lily to temporarily halt production of its hand sanitizer. Synergy has never authorized

Lily to resume production thereby repudiating is agreement to purchase the balance of its order.

12. At the time Synergy instructed Lily to halt production, Lily had approximately 6 

truckloads of finished products in its warehouse ready to be delivered to Synergy.

13. In order to encourage Synergy to take delivery of the 6 truckloads of finished 

product, Lily eventually offered to sell those loads to Synergy at a reduced price. Lily agreed to 

this because the products were taking up valuable space in Lily’s warehouse. Synergy agreed to 

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take 3 truckloads in the spring of 2021. Lily delivered the last 3 truckloads between December 

2021 and January 2022. However, Synergy did not timely pay Lily’s invoices for the last 3 

truckloads.

14. Lily acquired significant quantities of raw materials and packaging supplies to fill 

Synergy’s hand sanitizer orders. As a result of Synergy’s repudiation of its remaining orders, 

Lily has no use for the remaining of such raw materials and packaging supplies, most, if not all 

of which, are beyond their useful expiration dates.

15. On January 6, 2022, Jack Ross (“Ross”), the Chairman and CEO of Synergy, 

requested Jack Brown (“Brown”), Lily’s V.P. of Sales & Marketing, to set up a call to discuss 

ordering a 2 oz. product called Focus Factor. As of January 2022, Synergy was indebted to Lily 

in the amount of $554,189.44 for hand sanitizer that Lily had manufactured for and delivered to 

Synergy. 

16. The requested call occurred on or about January 18, 2022. On the call were Ross

and Brown. During the call, Ross requested Lily to produce approximately 500,000 bottles of 

Focus Factor, a product that Lily had manufactured for Synergy before, on net 30 days terms. 

Because of Synergy’s failure to honor its previous obligations, Brown informed Ross that he 

could not say whether Lily would agree to manufacture the Focus Factor. Ross asked whether 

Lily would provide 30 day terms if Synergy paid the outstanding balance for the hand sanitizer. 

Brown told Ross that he would have to discuss the matter with Lily’s CFO and CEO. Ross then 

asked Brown to obtain costing for the potential Focus Factor order. Over the next few weeks, 

Lily compiled pricing information for the potential focus factor order which was shared with 

Synergy.

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17. On March 7, 2022, Ross requested another call with Brown and Halford. That 

call took place on March 7, 2022. Ross, Brown and Halford were on the call. During the call, 

Ross asked whether Lily would accept the Focus Factor order that the parties had been

discussing for several weeks and provide Synergy with net 30 day terms on the new order if 

Synergy paid the outstanding invoices for hand sanitizer. Additionally, in order to induce Lily to 

provide the requested terms, Ross represented that, if Lily did so, Synergy was prepared to make 

the hand sanitizer payment immediately and could and would pay any Focus Factor invoices 

within thirty days of the invoice. Ross further stated that he anticipated that Synergy would 

place additional orders for Focus Factor in the future. In reliance on Ross’ representation that 

Synergy could and would pay for the Focus Factor within 30 days of invoice, Halford informed 

Ross that, if Synergy made the hand sanitizer payment, then Lily would accept the order. 

18. On March 7, 2022, Synergy delivered a purchase order for 550,008 bottles of 

Focus Factor (the “PO”) to Lily. The PO called for delivery no later than April 4, 2022. Within 

15 minutes of receiving the PO, Brown informed Ross that Lily could not agree to an April 4 

shipping date and provided a general guideline for timing of delivery of the order. Later in the 

day on March 7, 2022, Synergy paid the balance of the hand sanitizer invoices totaling 

$554,189.44. Based upon Synergy’s payment of the outstanding hand sanitizer invoices and 

Ross’ assurance that Synergy could and would pay for the Focus Factor within 30 days of 

invoicing, Lily accepted the order and began the process required to manufacture and deliver the 

product.

19. Between July 11 and 18, 2022, Lily delivered the Focus Factor order to Synergy 

and issued invoices totaling $394,932.37. Synergy accepted the Focus Factor and has never 

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rescinded that acceptance or raised any issues with respect to the order. The Focus Factor was 

delivered to Synergy pursuant to the delivery timeline provided by Brown on March 7, 2022.

20. On August 15, 2022, Halford sent an email to Ross reminding him that Lily’s 

invoices would be due that week and requesting that he indicate when payment would be made. 

Ross did not respond to the August 15 email. On August 29, 2022, Brown forwarded the August 

15 email to Ross again, informing him that Synergy’s invoices were more than 30 days overdue 

and requesting that he inform Halford when payment would be made. The next day, Ross 

indicated he was on vacation and would review the matter “the minute” he got back. Ross did not 

further respond to either the August 15 or August 29 emails.

21. On September 8, 2022, Brown sent Ross an email expressing frustration that the 

invoices were approaching 60 days overdue. Brown requested again that Ross contact Halford 

and let him know when the invoices would be paid. Ross did not respond to the September 8 

email. On September 13, 2022, Brown sent another email to Ross asking him why he was 

ignoring Lily’s emails. Again, Brown asked Ross to indicate when the invoices would be paid. 

On September 15, 2022, Ross responded to the September 13 email by indicating that he would 

call Halford the following morning. Ross did not call Halford.

22. Accordingly, on September 19, 2022, Halford sent Ross an email demanding 

payment of the outstanding invoices. On September 21, 2022, Ross responded to the September 

19 email and stated that Lily would get paid the following Friday. However, again no payment 

was made. Halford continued to request confirmation that payment would be made. On 

November 2, 2022, Ross emailed Halford stating that “it won’t be much longer for sure” before 

Synergy paid the outstanding invoices. On November 23, 2022, Brown requested an update on 

payment. The next day Ross responded saying he would have more information the following 

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week. No further information was provided the following week. On December 8, 2022, Brown 

again requested that Ross provide an update on when Synergy would pay the invoices. The next 

day, Ross responded that Lily would “for sure get paid before the end of December.” The end of 

December came and went with no payment forthcoming. Ross did not respond to Lily’s 

subsequent requests for the status of payment.

23. Based upon Ross’s conduct following delivery of the Focus Factor, his failure to 

express any problems with the Focus Factor order, his repeated assurances that Lily’s payment 

was imminent, and his failure to articulate any basis for Synergy’s failure to pay, Lily believes 

that, when Ross represented to Halford that Synergy intended to, could and would pay the Focus 

Factor invoices within 30 days, he either knew that Synergy had no intention of paying those 

invoices or did not know whether Synergy would be capable of paying those invoices but that he 

nevertheless made those representations to Halford in order to induce Lily into manufacturing 

and delivering the Focus Factor to Synergy. Lily relied on such representations by accepting 

Synergy’s order and manufacturing and delivering the Focus Factor. But for such 

misrepresentations, Lily would not have accepted the order or manufactured and delivered the 

Focus Factor to Synergy. At all relevant times hereto, the Focus Factor was the property of Lily.

24. The transactions between the parties were for the sale of goods and are governed 

by Article II of the UCC. 

25. All conditions precedent to Lily’s right to recovery have occurred or been waived.

V. CAUSES OF ACTION

A. Count One – Breach of Contract

26. Lily incorporates the preceding paragraphs as if set forth verbatim herein.

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27. As set forth above, Synergy entered into contracts with Lily to purchase hand 

sanitizer and Focus Factor. Lily performed its obligations under such contracts. 

28. Synergy failed to perform its obligations under the hand sanitizer contracts by 

instructing Lily to cease production and failing to take delivery of finished goods. As a result, 

Synergy repudiated and breached the contract without excuse or justification.

29. Synergy failed to perform its obligations under the Focus Factor contract by 

failing to pay Lily’s invoices for the goods, which Lily delivered, and which Synergy accepted.

30. As a result of the foregoing, Lily has suffered damages within this Court’s 

jurisdictional limits for which Synergy is liable to Lily.

B. Count Two - Fraud

31. Lily incorporates the preceding paragraphs as if set forth verbatim herein.

32. As set forth above, Ross, in his capacity as the CEO of Synergy, made material 

misrepresentations to Lily in order to induce Lily to manufacture and deliver approximately 

500,000 bottles of Focus Factor to Synergy. Specifically, on March 7, 2022, Ross represented 

to Halford that Synergy intended to, could and would definitely pay any Focus Factor invoices 

within thirty days of the invoice. In reliance on Ross’ representations that Synergy could and 

would pay for the Focus Factor within 30 days of invoicing, Lily accepted the order, and 

manufactured and delivered the product. As set forth above, Lily believes that, at the time Ross 

made such representations, he either knew that Synergy would not pay for the Focus Factor or 

he did not know whether Synergy could pay for the Focus Factor but nevertheless made such 

representations with the intent that Lily rely on them and manufacture and deliver the goods. 

But for such misrepresentations, Lily would not have manufactured and delivered the Focus 

Factor.

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33. Lily reasonably relied on Ross’ misrepresentations by manufacturing and 

delivering approximately 500,000 bottles of Focus Factor to Synergy. Ross was acting in the 

scope of his employment as the CEO of Synergy when he made such misrepresentations on 

behalf of Synergy. 

34. As a result of such conduct, Lily has suffered damages within this Court’s 

jurisdictional limits in the form of the unpaid purchase price of the Focus Factor for which Ross 

and Synergy are jointly and severally liable. Additionally, as set forth above, such conduct was 

intentional and/or fraudulent. Accordingly, Lily is entitled to recover exemplary damages from 

Synergy and Ross.

C. Count Three – Attorneys’ Fees

35. Lily incorporates the preceding paragraphs as if set forth verbatim herein.

36. Lily seeks to recover its reasonable and necessary attorneys’ fees incurred herein 

from both Synergy and Ross as the prevailing party and pursuant to Tex. Civ. Prac. & Rem. 

Code § 38.001, et seq.

VI. DEMAND FOR JURY

37. Lily hereby demands a trial by jury on all issues so triable.

VII. REQUEST FOR RELIEF

Lily respectfully requests that, upon trial herein, it be awarded the following relief;

a. Compensatory damages including, without limitation, lost profits and incidental 

damages;

b. The price of the Focus Factor delivered to Synergy pursuant to Tex. Bus. & Comm. 

Code § 2.709;

c. Exemplary damages;

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d. Attorneys’ fees and costs of court; and

e. Such other relief to which it may show itself to be justly entitled.

Respectfully Submitted,

By: /s/ Baxter W. Banowsky 

 Baxter W. Banowsky

 State Bar No. 00783593 

bwb@banowsky.com

BANOWSKY, P.C.

12801 N. Central Expressway

 Suite 1700

 Dallas, Texas 75243

 Telephone: (214) 871-1300

 Facsimile: (214) 871-0038

 

ATTORNEY FOR PLAINTIFF

CERTIFICATE OF SERVICE

I certify that a true and correct copy of the foregoing was served upon all counsel of 

record contemporaneously with its filing by the Court’s ECF system.

/s/ Baxter W. Banowsky

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