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Samsung Wants Circuit City to Return $74M in Product



By Erik Gruenwedel | Posted: 02 Dec 2008


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.


 



User comments

Commented by Anonymous
Posted on 2008-12-02 21:38:47

What part of this do they not understand? That is why they call it bankrupcy "protection" for Chapter 11. Also they haven't read the rules closely. If CC paid them any cash in the 120 days prior to filing - Samsung may be made to cough it back up. The purpose of Chapter 11 is to preserve the filing company. NOT to protect the creditors. All Samsung is gonna do is pixx off the Federal Judge Typical Samsung. They are like Alfred E Neuman (tm Mad Magazine)... The Grump


Commented by Anonymous
Posted on 2008-12-03 05:55:45

Can anyone provide a success story of a company that has filed Chapter 11 and emerged profitable WITHOUT a significant change in management or business model?


Commented by Anonymous
Posted on 2008-12-03 12:55:30

So what does all this mean? Will Circuit City start selling Samsung Blu-rays for $99? When will the PS3 be $199? These are my two price-breaks. BTW: The XBOX 360 is mine as soon as it reaches $99 (No H/D), $149 (60GB H/D), $199 (120GB H/D).


Commented by Anonymous
Posted on 2008-12-05 06:41:24

What this means is C City is done! No vendor in their right mind is going to send them goods. If you research a bit deeper you will find that they owe Sony, HP and everyone else out there hundreds of millions of dollars as well!





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