Confusion between the law and the intent of the law
Jerry Epperson -- Furniture Today, January 16, 2013
Jerry Epperson An insider’s view
Too often there is confusion between the law and the intent of the law.
After having eight containers of lamps detained by U.S. Customs and Border Protection in California, on Jan. 26 of last year, 30 armed federal agents stormed into GuildMaster's offices in Springfield, Mo., searching inventories and computers, while sequestering employees during their investigation. All lamps were loaded into eight tractor-trailer trucks and taken away.
The problem turned out to be that GuildMaster's factory in China had used an improper Underwriters Laboratories (U.L.) sticker on approximately 5,150 lamps. This was never a safety issue. The sockets, wiring and plugs were purchased from a supplier that was U.L. certified, as marked on the various component parts.
The misplaced and easily removed 10-cent stickers have kept more than $1.9 million in lamps from being sold to GuildMaster's customers, created hundreds of thousands of dollars in legal expense, and forced GuildMaster to recently file a petition for reorganization relief under Chapter 11 of the Bankruptcy Code.
GuildMaster has admitted the stickers on the lamps were a mistake and offered to remove them all, but Customs and Border Protection, a division of the U.S. Homeland Security, has continued to prosecute and the issue is in the courts.
I have known GuildMaster's CEO, Steve Crowder, for many years and have enjoyed seeing his products and visiting with him in his first floor showroom in the C&D building in High Point. The cash flow interruption of not being able to sell its inventory and paying massive legal fees forced the bankruptcy filing.
Yes, I have heard only one side of this story, but it does illustrate how very complicated it has become to do business in the U.S. Add in globalization, and the difficulties grow even more.
I have no doubt we have companies that purposely shortcut the regulations but that was not the case here. Let's hope GuildMaster can emerge from this process even stronger than before and that the intent of the law is recognized.
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