True Management sues Olein Recovery over $500K contract breach claim
True Management Enterprises, LLC (TME) has filed a lawsuit at the U.S. District Court in Puerto Rico seeking more than $500,000 in damages from Olein Recovery Corporation, alleging breach of contract, tortious interference, unjust enrichment, and related claims tied to an exclusive distribution agreement for hemp-based smoking wraps.
In its complaint, TME said the dispute stems from a March 2023 “Exclusive Sub-Distribution Agreement” designating Olein as the sole sub-distributor for the “Mag-X” hemp wrap line in Puerto Rico.
The agreement, retroactive to February 2023, prohibited Olein from distributing competing smoking products. TME alleges that after receiving “months of collaboration and good faith efforts,” Olein secretly developed a directly competing hemp wrap product in violation of its exclusivity obligations.
“The purpose of this exclusivity provision was to prevent Olein from diverting sales or creating market confusion,” the lawsuit states, adding that the breach was compounded when Olein “terminated TME’s credit line and refused to remit payment for the outstanding balance” on the last purchase order.
The complaint details TME’s investment in training Olein’s personnel, covering marketing and operational expenses, and providing credit accommodations, with outstanding balances ranging from $40,000 to $170,000 during the agreement.
TME claims Olein had no prior experience in the smoking products category and relied heavily on TME’s guidance to develop its sales efforts.
In November 2024, TME said it learned that Olein planned to distribute a hemp wrap produced by individuals connected to its leadership, including the son of Olein’s vice president of operations. TME alleges Olein never disclosed this plan despite the clear contractual prohibition.
The filing recounts two meetings in Yabucoa, where TME sought an amicable resolution. According to the lawsuit, Olein rejected the company’s proposal, made a counteroffer TME deemed unacceptable, and later expressed interest in acquiring TME.
After TME provided financial valuations in March 2025, Olein allegedly stopped responding and took “retaliatory” actions by cutting the credit line and withholding payments.
TME accuses Olein of materially breaching the contract by “engaging in direct competition, failing to maintain infrastructure and adequately promote the product, wrongfully terminating Plaintiff’s credit line, and refusing to remit payment for outstanding balances.”
The suit also claims Olein intentionally interfered with TME’s business relationships and benefitted from TME’s investments without compensation.
The damages sought include lost profits, reputational harm, and wasted investments. TME is requesting compensatory and consequential damages, restitution, attorneys’ fees, and interest, along with punitive damages “to the extent permitted by law.”
The company has demanded a jury trial in the case assigned to Judge Pedro A. Delgado-Hernández.
