GuildMaster files lawsuit for return of seized lamps

Jenny Heinzen York -- Furniture Today, January 14, 2013

SPRINGFIELD, Mo. - Home accents and furniture source GuildMaster has sued the federal government for the return of 5,150 lamps that federal agents seized early in 2012 because of fraudulent Underwriters Laboratories stickers.
     The suit, filed in U.S. Bankruptcy Court for the Western District of Missouri, was the latest move in a case in which the federal government indicted GuildMaster for importing lamps with the counterfeit or unauthorized stickers. On Dec. 13, the company filed for Chapter 11 bankruptcy reorganization.
     The lamps were manufactured and shipped a year ago, according to a statement from GuildMaster. The federal indictment calls for forfeiture and destruction of the lamps, which GuildMaster has valued at $900,000 and the government has valued at $1.9 million.
     The Dec. 12 indictment covered nine counts related to the December 2011 shipments of lamps bearing a removable, unlicensed sticker indicating a UL trademark. The lamps were manufactured by Dongguan Yangming Hardware Crafts Limited, a lamp factory purchased by GuildMaster in late 2011.
     "The employees of the Chinese plant decided indiscriminately and incorrectly - without U.S. personnel or U.S. management knowledge - that the lamps needed to have the UL-certified stickers on them," said Steve Crowder, GuildMaster CEO. "We first learned of the offending stickers on Jan. 27, 2012, the day after the seizure and immediately agreed that the removable stickers should not be on the lamps and had the stickers removed and destroyed in China."
     GuildMaster lamps are constructed of UL-certified components, but the stickers are considered counterfeit because GuildMaster does not hold a license for UL-certified Portable Luminaire assembly.
     "The basis for this motion to return the lamps is that the seized lamps are property of the ‘estate' under bankruptcy code and that because removing the sticker eliminates the issue, the lamps should be returned to GuildMaster to sell in order to pay our debtors under bankruptcy protection," Crowder said. "Since the seizure we have manufactured and shipped thousands of lamps - sans the counterfeit stickers - with no further audits or government inspections. It makes no sense to destroy the lamps when removing the stickers solves the problem."
     The suit filed by GuildMaster includes motions seeking:
     ► The right for GuildMaster to inspect all of the lamps to clarify whether all of the lamps actually bear the counterfeit stickers and therefore were seized improperly. The bankruptcy judge has already ruled in favor of GuildMaster on this motion, according to a company statement.
     ► Return of the 5,150 lamps after the stickers are removed to GuildMaster for sale to its customers.
     "We have operated with total integrity and transparency throughout this ordeal. After much thought, we filed suit against the government for return of the lamps because doing what is right is more important than the bottom line. We are fighting for jobs and for people to live in a world of common sense," Crowder said.
     In the meantime, Guild- Master is conducting business as usual and is shipping all products as it moves forward under Chapter 11 bankruptcy protection, according to a company statement.