Mills, Dan River clash over container ownership
By Staff -- Home Textiles Today, 5/14/2008 2:15:00 PM
Wilmington, Del. – The battle continues between Dan River and a group of off-shore 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 $6.3 million worth of 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 April 20 for Chapter 11 protection. Since then, a group of mills from Pakistan has filed suit against Dan River, parent GHCL and UK home textiles chain Roseby’s, 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.
noman afzal - 2008-05-16 06:34:00 EDT
Dan RIver case study reflects abuse of Laws to further punish the one in trouble rather than the troublemaker. Dan River is in bankruptcy because ts business plan failed, so it should go down alone but it is using copyright laws to destroy legitimate businessmen who were honest in their commitments. Court should not let any benefit of copyright laws to go to Dan river. Simply because it didnt hold its part of the bargain and didnt pay up or for that matter, has no intentions of ever paying up for any shipment. The intent was fraud and now Dan river is eyeing the stuck up containers as booty. Everyone knows the demuarrage piled up because Dan river failed its commitment not the shippers. All mills should be allowed to get the release of the containers and Dan river should pay up for the demuarrages. If Mills have to pay for demuarrage then the US customs should be asked to waive the duty and let the importers release the goods under no duty and sell it in US mrket. There is a lot of hardship in this solution too but atleast it will NOT add insult to injury. Incase all goes in favor of Dan river then all the directors should be labelled as fraud and their names posted with interpol. These directors should be brought to justice in the countries where the affected mills are located. This is actually where all affectees are, the owners who are going bankrupt and thousands of laborers who are on the edge of loosing their jobs. This casestudy should be included in every business school in Pakistan and a special course should be introduced to teach the future businessmen on how to safeguard themselves from Intentional frauds like Dan river.
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