Judge Approves GE’s Seizing Sixth Avenue Electronics Assets
A federal judge approved seizing $12 million in collateral from Sixth Avenue Electronics, possibly spelling the end for the chain that closed stores at a rapid clip this year. U.S. District Judge William Martini, Newark, N.J., issued a preliminary injunction barring Sixth Avenue from “selling, transferring or removing” inventory and store fixtures from its three remaining locations and Springfield, N.J., distribution. Martini also signed an order proposed by lender GE Commercial Distribution Finance that cleared the way for county sheriffs to seize collateral to satisfy the $5.8 million owed on a financing agreement.
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Martini also reserved for GE the right to seek monetary damages “suffered as the result of the loss of use and depreciation” of the property involved. It wasn’t clear Friday whether sheriffs had moved to seize the property. Joann Sternheimer, attorney for GE, and Joel Schneck, attorney for Sixth Avenue, weren’t available for comment. But Schneck, in a letter to Martini, said the chain agreed to the order being entered. Schneck didn’t appear at a hearing on GE’s motion for a preliminary injunction.
Sixth Avenue tangled with GE throughout the year, starting when GE sued the chain in March after it defaulted on a $6.37 million payment. Sixth Avenue appeared to gain a reprieve in April when it sold 33 percent of the company to Albert Houllou, a principal in Broadway Photo, and reached a settlement with GE. But GE filed suit again on Sept. 29 after Sixth Avenue missed a $2 million payment. By that time, Sixth Avenue had shrunk to three stores from 19 with remaining locations in Paramus, Somerset and Woodbridge, N.J. The 29-year-old chain’s fall began earlier in February when it shut three locations in the Philadelphia area and dropped major appliances and videogames from its shelves. Sixth Avenue was founded by the Temiz family with brothers Mike and Billy serving as president and chairman. Billy Temiz launched Sixth Avenue Electronics in 1982 in New York City and was joined by Mike seven years later. A third Temiz brother, Leon Temiz, sold his shares in the company and split off in 2003 to form New Jersey-based Electronics Expo.