Mills, Dan River Clash Over Containers

By Staff -- Home Textiles Today, 5/19/2008 12:00:00 AM

Wilmington, Del. —

The battle continues between Dan River and a group of offshore mills that contend the liquidating U.S. division of the Indian conglomerate GHCL owes them a collective $30 million for merchandise.

With U.S. port authorities in Norfolk, Va., demanding a reported $2 million in demurrage for goods tied up in port, both parties are fighting over ownership of the goods as well as money.

Dan River has proffered a temporary trademark agreement that would allow 23 offshore mills — mostly from Pakistan, some of them from China — to take possession of containers carrying approximately worth $6.3 million in goods currently stuck in port. The catch: rather than receiving payment, the manufacturers would pay Dan River a fee for intellectual property rights related to designs it commissioned for the goods.

Manufacturers would pay 5% of the value of goods bound for Wal-Mart, and 10% of the value of goods bound for other retailers or distributors.

The bankruptcy court has ruled that among all containers filled with Dan River merchandise bogged down in port, DR has an interest in 71 of them. The court has granted the company time to attempt to pay the demurrage and other fees to get them released.

Control of the rest has been turned over to Expeditors International of Washington Inc., which has notified manufacturers they can claim their containers upon receipt of the demurrage and related handling fees.

Dan River filed for Chapter 11 protection on April 20. Since then, a group of mills from Pakistan has filed suit against Dan River, parent GHCL and U.K. home textiles chain Rosebys, also owned by GHCL. The suit claims some goods invoiced to Dan River — for which they may never receive payment under the bankruptcy settlement — were actually distributed to other GHCL divisions not in bankruptcy.