Salem helmet maker charges insurance companies sold its fire-damaged products as new and government approved

Kerr Leathers, which suffered a warehouse fire in 2010, says two insurance companies re-sold the damaged helmets they took as new - potentially endangering customers and competing against the company with its own products.

In a multi-million-dollar lawsuit filed yesterday in U.S. District Court, Kerr alleges that while it gave permission to Zurich North America and Farmers Insurance to take possession of the helmets as "salvage" and to resell them, they did so only on condition buyers know their provenance.

In fact, Kerr says, they let a company - also named in the suit - market them online as "new" and "DOT certified" - and at a considerable discount over their normal cost.

Kerry charges this led to complaints from dealers to whom it normally sells helmets, who dropped the line when they could no longer compete. Also:

Given the damage the Kerr products sustained in the warehouse fire, the products are unsafe, will not perform as indicated and certainly should not be marketed as DOT certified. Marketing these Kerr products as either new or DOT certified, when in fact they are not, results in harm to Kerr's goodwill and reputation.