Routine bankruptcy case contains intriguing twist
Larry Thomas, Business editor -- Furniture Today, November 9, 2008
Chapter 11 bankruptcy cases often involve thousands of pages of mind-numbing documents that only judges, lawyers and creditors can read without falling asleep. But Universal Furniture's recent attempt to inject itself into the Collezione Europa bankruptcy proceedings has added an element of mystery that's normally absent from such cases.
Universal has objected to what is normally a routine motion filed by Collezione to liquidate about $2 million worth of inventory in a North Carolina warehouse.
The reason? Universal says the inventory may include merchandise that was impounded by a federal judge on Nov. 30, 2007, after Universal won a copyright infringement case against Collezione. And in a court filing objecting to the inventory sale, Universal implies that one of the reasons Collezione sought Chapter 11 protection was to avoid paying monetary damages to Universal.
Universal's filing in U.S. Bankruptcy Court in Newark, N.J., says that Collezione filed for bankruptcy protection on Feb. 29 — three days after a federal Appeals Court denied Collezione's motion to delay a damage award hearing that had been set by federal district judge William Osteen in Greensboro, N.C. Osteen, who ruled in September 2007 that two Collezione collections violated several Universal copyrights, conducted that hearing on June 4 but has yet to issue a damage order, according to Universal's filing.
Universal argues that Osteen's impoundment order — part of a permanent injunction barring Collezione from marketing and selling the disputed furniture — should not be ignored by the bankruptcy court.
“(Collezione Europa) seeks to make an end run around the permanent injunction through an abandonment order framed in the vaguest possible terms,” Universal argued in its written objection. “Simply leaving the disputed furniture at a location where consumers or other competitors can carry it away would violate the permanent injunction.”
U.S. Bankruptcy Judge Morris Stern has scheduled a hearing on Universal's motion this week, but the hearing has been postponed at least once already, so don't hold your breath awaiting the outcome.
The dispute between Universal and Collezione dates back to October 2004, when Collezione introduced two collections that Universal said were blatant knockoffs of its English Manor and Grand Inheritance collections.
Universal filed suit against the company on Oct. 22, 2004, and after months of settlement negotiations, a three-day trial was held beginning May 14, 2007. Osteen ruled on Sept. 14, 2007, that Collezione did indeed commit copyright infringement, as well as unfair and deceptive trade practices and unfair competition with regard to the two collections. His permanent injunction followed on Nov. 30, 2007.
Collezione sought to have the injunction postponed pending its appeal of Osteen's ruling, but that request was denied on Jan. 3, 2008. Its original appeal of the ruling is still pending before the U.S. Appeals Court.
Opinion columns are available online at www.furnituretoday.com.
-
Collezione Europa seeking approval for liquidation
Oct 20, 2008 -
Collezione seeks court OK for asset liquidation
Nov 2, 2008
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
