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Dep Corp. Chairman Robert Berglass has always been a smart bottom-fisher, scooping up such rundown brands as Lavoris, Topol and Porcelana, and giving them a chance at a new life.

The strategy had paid off handsomely, with Dep's sales reaching an estimated $123.7 million. Then, in August 1993 Dep finalized a $45 million acquisition of the Halsa and Agree haircare brands from S.C. Johnson & Son.

In a matter of months, Mr. Berglass has become known around the personal-care industry as the man who "bought a pig in a poke," as one industry executive familiar with the two companies put it.

"Sales for Halsa and Agree are about $48 million, and they have been losing a lot of space in stores. Given that, he paid a premium. Why I don't know," this executive said. "This was a big acquisition for Berglass."

Since the questionable purchase, Dep itself is said to have become an acquisition target (see .

In a lawsuit filed March 2 in U.S. District Court in Los Angeles, Dep contends it was misled by Johnson as to the condition of the Halsa and Agree businesses and the brands' standing with retailers.

Indeed, industry executives say both brands were heavily discounted, but that wasn't enough to stop the loss of retail space as Procter & Gamble Co.'s Pantene squeezed tertiary brands such as Halsa and Agree off of store shelves.

Industry observers say the two brands have yet to regain distribution and add they were surprised that Mr. Berglass was caught off-guard by the severity of the situation.

Court papers charge that "Johnson intentionally misrepresented to and concealed from Dep material facts."

As a result, Dep is seeking to cancel the deal and retrieve its $45 million "plus interest, consequential damages, attorneys' fees" and other relief. The company is also seeking punitive damages of $50 million, and another $25 million-plus for breach of contract.

The lawsuit contends "the misrepresentations and omissions by Johnson were despicable, oppressive, deceitful, malicious and motivated by corporate greed in that Johnson knew that its marketing and selling practices and product dumping would destroy or substantially damage large segments of the North American market for the products."

While neither company would comment on the case, industry observers believe a nasty court battle is likely.

The thinking is that Johnson will refuse to settle: Having sold the Halsa and Agree brands once, no one believes it has any desire to get them back.

Dep, in the meantime, is moving to resuscitate the brands, both handled by Coen/Johnson, Los Angeles.

A new line of Halsa products will hit stores this spring, while starting in May, Agree will be backed with a national TV and print campaign, marking its first TV advertising in two years.

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