Despite a widely announced closure, Dick Smith will grace consumers with thousands of cut-price television sets at its ongoing liquidation sales. The “TV bonanza” follows the ruling of a Federal Court in Sydney favouring administrator Ferrier Hodgson’s right to sell the TVs as a culmination of the legal tangle between Dick Smith, Shipping Company Toll Holdings and Chinese manufacturer Shenzhen MTC.
Ferrier Hodgson confirmed that the TVs would be sold “through the stock realisation sale process currently underway as part of the controlled store closure program.”
Dick Smith had announced the closure of its 301 Australian and 62 New Zealand retail stores in February. The stores will all be closed by the end of April. Dick Smith’s brand name has already been recently acquired by Ruslan Kogan to be incorporated into its online business.
The TV tangle started when Chinese manufacturer, Shenzhen MTC, after knowing about the collapse of Dick Smith on January 4, urged the shipping company not to release 17 containers of televisions shipped to Australia, reports News Corp.
Shenzhen, in an e-mail to Toll on January 5 urged: “DSE: please urgently hold cargo, and recall. Urgent Case!”
Shenzhen was concerned that its payment will be stuck as Dick Smith will be under receiver administration for credit default. The invoiced price for the containers was $1.8 million.
However, Toll Holdings released three containers. But 14 containers ended up gathering dust in warehouses as a legal case erupted after Toll refused to pay the outstanding customs duties. Dick Smith had lost its direct debit arrangement with Customs on Jan 4.
Toll Holdings later took MTC, Dick Smith and receivers to court to decide who should get the goods. Justice Steven Rares in his ruling said Dick Smith has the right to get the TVs, notes the Appliance Retailer report.
The court in Sydney ruled that MTC can recover the damages from Toll for the loss of goods it suffered at a value that must be decided.
“The receivers are conducting closing down sales of Dick Smith’s business over about the next six weeks. They hope to sell the disputed cargoes to engorge the receipts of that process while leaving MTC in the position of being an unsecured creditor,” Justice Rares wrote.