GE Lenders Resume Battle to Seize Sixth Avenue Electronics Collateral
GE Commercial Distribution Finance resumed its battle to seize $12 million in collateral from Sixth Avenue Electronics, in a move that could close what’s left of the New Jersey chain. A hearing in U.S. District Court, Newark, N.J., is scheduled for Wednesday on GE’s motion for a preliminary injunction barring Sixth Avenue from “dismantling, removing or concealing” inventory and store fixtures held as collateral against $5.8 million owed on a financing agreement.
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GE terminated its four-year-old credit facility with Sixth Avenue, which has shrunk to only three stores from 19, earlier this year. GE sued Sixth Avenue for breach of contract earlier this year after the chain defaulted on a $6.37 million payment. It missed a $2 million payment in September, but returned some inventory on Sept. 21, GE said. The companies originally reached a settlement in March, prompting GE to have its suit dismissed and vendors to restart shipments to the chain. The retailer initially in September “refused to allow” GE to recover the collateral, much of which could be “dissipated and disposed of in a very short time frame” given its “mobile nature,” GE said. In addition to the stores, Sixth Avenue also has a Springfield, N.J., warehouse. Sixth Avenue officials weren’t available for comment.
Sixth Avenue settled the original suit with GE after selling 33 percent of the chain in April to a “non-operating partner” later identified as Albert Houllou, a principal in the retailer Broadway Photo. Houllou’s Broadway Photo reached a settlement earlier this year with the Texas Attorney General’s office on allegations that the retailer’s online business misled customers in the description and quality of the products it sold.
Meanwhile, Toshiba America Information Systems also sued Sixth Avenue in Newark federal court alleging it was owed $1.2 million for inventory shipped between last December and May 6 of this year. Sixth Avenue was required to pay for the goods within 30 days of the invoice being issued, Toshiba said. BSH Holdings, which sells major appliances under the Bosch brand, also renewed efforts to get $782,000 it was owed by Sixth Avenue from a distribution agreement that ended in September 2010, the company said. BSH, which had settled with Sixth Avenue earlier this year, filed a new suit on Sept. 7 to recover the money.