Window Blind Makers in Battle Over Ad : Litigation: A bitter legal dispute has intensified after 3 Day Blinds published a notice about competitor Qwik Blinds’ bankruptcy filing.

An acrimonious legal battle between two competing Southland window blind makers has escalated after 3 Day Blinds placed ads in major regional publications proclaiming that Qwik Blinds filed for bankruptcy protection last May.

The ad, which ran late last month in more than 1 million copies of the Pennysaver, the Orange County Register and all editions of The Los Angeles Times, warned shoppers about falling “victim to their (Qwik Blinds’) problems.”

“It’s your money. Don’t throw it out the window,” said the ad, which apparently was delivered after deadline to the newspapers and not properly reviewed, according to Qwik Blinds’ attorney Norman Hanover.

The ad, headlined “A chapter of the book Qwik Blinds doesn’t want you to know about,” says it was paid for by 3 Day Blinds in tiny print in the bottom right corner.

Art Schumann, president of 3 Day Blinds in Anaheim, said the ad was written to inform customers of Qwik Blinds’ legal problems.

“We were well aware that it was a very aggressive ad,” said Schumann. “We expected some reaction.”

The two competitors have been embroiled in a lawsuit since 3 Day Blinds sued Qwik Blinds last year, contending that Qwik Blinds obtained important trade information from 3 Day Blinds employees. The case is pending in San Bernardino Superior Court.

On May 3, 1990, Ontario-based Qwik Blinds filed for protection under Chapter 11 of the federal bankruptcy code in San Bernardino. Qwik Blinds said that the filing is a matter of public record and that 3 Day Blinds’ ad misrepresents the company’s condition.

Although Qwik Blinds, which has 23 stores in Southern California, is stable and profitable, founder and owner David Blachley said he filed for bankruptcy protection because the company is involved in the two lawsuits with competitors.

In addition to the suit filed by 3 Day Blinds, alleging unfair trade practices, Qwik Blinds has also been sued in Los Angeles federal court by Wrisco Inc., a Florida manufacturer of window blind-making equipment. The Wrisco lawsuit stems from a dispute over unpaid bills and is being resolved, according to Qwik Blinds’ attorney David Ricks.

Blachley said the bankruptcy petition also put off thousands of dollars in personal medical bills stemming from a water-skiing accident that nearly severed his leg 2 1/2 years ago. Blachley, who had no medical insurance at the time, has undergone several reconstructive surgeries to save his leg. He still relies on crutches to get around his 50,000-square-foot factory.

Blachley said the much larger 3 Day Blinds is doing everything it can to put him out of business, including filing papers urging the bankruptcy judge to appoint a trustee over Qwik Blinds’ operations. Although 3 Day is not a creditor, it claims to be an interested party in the bankruptcy case because of the lawsuit pending against Qwik Blinds.

U.S. Bankruptcy Judge Mitchel Goldberg, who has heard six days of testimony in the case, has not granted 3 Day’s request for a trustee.

“3 Day knows for a fact that Qwik Blinds made a ton of money last year,” Blachley said.

According to papers filed with the bankruptcy court in San Bernardino, Qwik Blinds reported about $350,000 in net income between the time the bankruptcy petition was filed in May and Dec. 31, 1990. Blachley said sales were about $7 million in 1990.

Schumann, who purchased 3 Day Blinds with a group of investors in 1989, was formerly president of Conroy’s, a retail florist. He said he ran the ad out of concern for the reputation of the window blind industry, which has been plagued with fly-by-night firms who collect deposits from customers but do not deliver the merchandise. 3 Day previously ran an ad with a similar message but did not mention Qwik Blinds by name.

“Blachley was expanding and we were concerned that he would overextend himself,” said Schumann, who denied that his firm’s ad agency deliberately delivered the ad after deadline to avoid scrutiny by the newspapers.

“There is nothing illegal about our ad,” he said. “I would have gotten very irritated if The Times or Register had refused to run it.”

Laura Morgan, spokeswoman for The Times, said the paper has told both companies that the ad will not run again.

“We shouldn’t have carried it,” Morgan said. “Our advertising pages are not the forum for that kind of attack on another company.”

Carlos Guzman, regional sales manager for the Pennysaver’s Inland Empire division, said he visited with Blachley to discuss the ad. He declined to comment further. Blachley said he was offered two weeks of free advertising as an apology from the Pennysaver.

Howard Grothe, vice president of advertising and marketing for the Register, was unavailable for comment Monday. However, in previously published reports, Grothe said he would have revised or declined to publish the ad if he had seen it. He said no one on his staff had questioned the ad before publication.

THE COMPANIES Qwik Blinds

Headquarters: Ontario

Employees: 100

Stores: 23

Annual sales: $7 million

3 Day Blinds

Headquarters: Anaheim

Employees: 1,000

Stores: 110