Medical supply company sues Virginia bank over canceled COVID-19 deal

Blue Flame Medical, a new medical supply company, is suing Chain Bridge Bank, blaming it for the loss of a $600 million deal with the state of California for COVID-19 supplies, The Wall Street Journal reported. 

According to the lawsuit, filed in a Virginia federal court, Chain Bridge Bank, based in McLean, Va., told California's treasurer that Blue Flame Medical may be fraudulent. 

Within hours of a warning from the bank, the state canceled its order with Blue Flame Medical, according to the Journal. The lawsuit alleges the canceled order and negative publicity that followed caused Blue Flame Medical to lose other orders. 

A few days after California canceled its deal with Blue Flame, Maryland canceled a $12.5 million deal for medical supplies and ventilators, the Journal reported. 

Blue Flame Medical said Chain Bridge Bank never gave it an indication that it believed the transaction was fraudulent, the Journal reported. 

Blue Flame's suit seeks lost profits and compensation for reputational damage to its founders. 

A spokesperson for Chain Bridge Bank told Becker's: "The bank acted properly and fulfilled its legal and regulatory responsibilities."

Read the full article here

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