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SBS Moves to Get Inventory Back from Joe’s

Published March 30, 2009

WILMINGTON, DE (BRAIN)—Seattle Bike Supply is asking bankrupt Joe’s Outdoors and More to return more than $82,000 in unpaid inventory.

Attorneys for SBS filed a notice of reclamation demand with Joe’s parent company, G.I. Joe’s Holding Company, on March 17 requesting that it return $82,889.42 worth of goods SBS delivered to Joe’s in the 45 days prior to the bankruptcy filing.

G.I. Joe’s filed for Chapter 11 bankruptcy on March 4.

Chuck Hooper, president of SBS, said the filing was standard procedure.

“The fact of the matter is the way the transaction occurred, it says we have the right to file for this right of reclamation therefore we pursued it,” Hooper said. “Would I spend as much as Raleigh lost trying to file for reclamation? No.”

Raleigh America is one of Joe’s largest unsecured creditors and stands to be out nearly $400,000 because of the bankruptcy.

In its letter, SBS attorneys asked G.I. Joe’s to identify and segregate the SBS goods, discontinue using and/or selling any of the goods being reclaimed, and provide SBS’ attorney with the name and contact information for a company representative who can work with SBS to arrange for the delivery of the items.

As an unsecured creditor, Hooper said he’s not holding his breath that the reclamation filing will net any returned inventory. SBS sold mostly generic repair items and accessories through Joe’s. None of its proprietary brands were sold through the 30-store Pacific Northwest sporting goods chain.

A number of industry companies are among Joe’s long list of creditors including Smith Optics, Easton Sport, Camelbak, Currie Technologies, Canari, Cascade Designs, Inc., Clif Bar, GoPro, Inno Racks, J & B Importers, Oakley, Shimano American, Yakima, Saris, Pacific Cycle and Thule.

The Committee of Unsecured Creditors, on which a representative from Raleigh sits, has filed a motion requesting the court change the case from Chapter 11 to Chapter 7, saying that the current proposed sale process in the case would “extinguish any meaningful opportunity for the debtors and the committee to attract a going-concern purchaser who might provide a return to unsecured creditors” and could remain an ongoing business partner.

The next hearing in the case is scheduled for Thursday.

—Nicole Formosa

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