Samsung Wants Circuit City to Return $74M in Product2 Dec, 2008 By: Erik Gruenwedel
Samsung Electronics America Dec. 2 said it is demanding that bankrupt Circuit City Stores return nearly $74 million worth of consumer electronics hardware, according to a U.S. bankruptcy court filing.
The Richfield Park, N.J.-based CE manufacturer said in a letter last month from Joseph McNamara, director financial services and business operations, to Bruce Besanko, EVP and CFO with Circuit City, that it twice requested the return of product shipments from Sept. 21 through Nov. 4.
Some of those shipments included Blu-ray players that were among Circuit City’s discounted products over the Black Friday weekend.
Circuit City filed for Chapter 11 bankruptcy protection Nov. 10.
“Samsung now has reason to believe that Circuit City Stores was insolvent at the time it received the goods,” said McNamara in the letter. “Please contact me to arrange for the immediate return of the reclaimed goods.”
The letter further demanded Circuit City “segregate the reclaimed goods” for the sole benefit of Samsung, in addition to providing an inventory of the reclaimed goods in its possession.
Circuit City spokesperson Bill Cimino downplayed the filing as standard operating procedure by a vendor during the course of a retailer’s bankruptcy.
He said there was nothing prejudicial in Samsung’s filing and that it should not be construed as anything more than an invoice establishing the right of ownership before the court.
Indeed, Toshiba America Consumer Products, among others, Nov. 26 filed reclamation of goods invoices (without the aforementioned language) for more than $20 million in product.
“Every vendor will file these claims,” Cimino said. “This is a routine filing. We expected this.”
Despite repeated attempts, Samsung’s McNamara was not available for comment.