King & Spalding partner Thad Wilson. (Courtesy photo)

A federal jury in Atlanta agreed a Marietta company that markets grills, heaters and gas logs owes $5 million to a now-bankrupt Chinese company for products it manufactured and shipped, but that the local company never paid for.

The verdict came on top of an earlier summary judgment order granting the Chinese bankruptcy trustees $10 million due to a promissory note, netting a total of $15 million for the plaintiffs by a group of King & Spalding lawyers handling the complex litigation.

Although there were issues of applicable Chinese bankruptcy law involved, K&S partner Thad Wilson said none of the issues were before the jury.

"The law wasn't really in contest here. This was really a breach of contract case," said Wilson, whose team was led by partner W. Ray Persons and included Mark Maloney, Jon Jordan and Nadia Saleem.

Nonetheless, said Wilson, the case "was certainly unique because it was the first time a Chinese bankruptcy administrator filed and succeeded in a lawsuit in the United States to recover assets."

The defendant, Sure Heat Manufacturing, is represented by Schreeder, Wheeler & Flint partners John Christy and Debra Wilson. They did not respond to queries Friday.

According to Thad Wilson and court filings, the case is rooted in a 2004 decision by Sure Heat majority owner and president Michael Mulberry to set up a Chinese subsidiary, Sure Heat China (Suzhou), to manufacture gas-fired barbecue grills, heaters and fireplace products to be marketed in the U.S.

In 2009 and 2010, the Chinese company supplied and invoiced more than $20 million worth of goods to the Georgia company but was never paid for them.

The Chinese company filed for bankruptcy in 2014, and plaintiff Suzhou Allpro Certified Public Accountants Co. was appointed bankruptcy trustee.

The trustees sent a letter to Sure Heat that year demanding more than $20.8 million. Its complaint, filed in the U.S. District Court for the Northern District of Georgia in 2015, said the U.S. company never responded.

The complaint leveled multiple claims, including breach of contract, unjust enrichment, fraud, conversion and civil conspiracy, among others, and named Sure Heat, Mulberry and two other corporate officers as defendants.

Judge Richard Story ultimately dismissed all claims against the individual defendants, and ruled that more than $5 million of the purported debt was barred by the statute of limitations.

But, ruling on summary judgment, Story also said the evidence showed Sure Heat had signed an enforceable promissory note for $10 million.

The remaining $5 million was not so easily disposed of, and a jury issue remained as to whether it was owed, Story said, allowing only a breach of contract claim to proceed on that count.

Wilson said his team was concerned by the possibility that fraught relations between the U.S. and China, fanned by President Donald Trump's comments and trade sanctions, could influence a jury: A motion in limine they filed in October said the defense, throughout the litigation, "have painted the actions of Chinese citizens, who are not parties to this case but share the same nationality and race as plaintiff's employees, in a defamatory light."

Among their complaints were statements by Mulberry referring to "rioting" Chinese employees, and indications that Sure Heat's counsel "have embraced Mulberry's anti-Chinese rhetoric as part of their litigation strategy."

The motion asked Story to exclude any evidence or argument of "illegal or violent behavior surrounding the closure" of the Chinese factory, but Story denied it because such evidence "could be admissible under certain circumstances," and said he would "address these issues as they arise at trial."

According to defense filings, the Chinese company over-billed Sure Heat U.S. by millions, and the latter was hit hard by the 2008 recession.

When the Chinese factory was struggling in 2010, according to a defense account, "a number of creditors showed up at the factory in China and rioted. They physically blocked trucks from leaving the factory with the shipments of finished products."

At the time, "Sure Heat China still had outstanding orders from Sure Heat US to be filled that would have generated revenue to pay creditors," it said. "It also had millions of dollars in equipment in place that still has not been fully accounted for. The inability to fulfill the pending orders resulted in significant losses to Sure Heat US and ultimately Sure Heat China. The factory never reopened and much of the inventory bound for Sure Heat's customers was never sent."

During an eight-day trial, Wilson said nine witnesses testified and nearly 100 exhibits were introduced.

In an "interesting side note," Wilson noted that Trump announced the U.S. reached a trade agreement with China three days into the trial.

On Jan. 23, after a total of about three hours of deliberations, the eight-member jury found for the plaintiffs. A Jan. 28 judgment awarded a total of $15 million.