Insolvency

Elizabeth, Swampwalker--I think the owner (a young, passionate audiophile) needs some time away from his business to mourn its demise and, slowly, to reorient himself.

Or it may be that the merchandise was no longer his; his creditors may have seized the assets (legally) to secure their debts. Or the merchandise may have been used as colaterral for loans that were not repaid (pretty much the same thing, I guess).

I would like to say what happened at the insolvency sale. Like kelly anticipated, it was a 'going out of business sale' with an external institution supervising the sale of the merchandise. Everything was discounted the same 40% irrespective of condition or other considerations. Nothing had a guarantee or a return policy. One of the sales personnel from the store ran around helping a thick crowd of customers. Needless to say, amidst the chaos there was no chance for a listening test of anything. It seems the good, expensive components were the first to go (Avalon speakers, Audio Note equipment, NBS cables, etc.) and the rest was sort of sold randomly. The owner of the store was mysteriously not present. There were many frustrated customers wanting cash for coupons and vouchers the store had given on trade ins. The external agency denied them any cash returns. They were all given an address to write to in order to be put on a list of creditors. There were also many people expressing surprise and disappointment that the store was closing. Reasons for its bankruptcy ranged among a number of different explanations. The salesperson present does not have plans to go into audio retail again. He gave me his telephone number and we will remain in contact on a private basis.

The store is in Europe. The electronics is all 220/230 volt. The value added tax is 16% in this country. There are huge customs fees to pay if you want to transport back to the USA. It will cost you a few hundred dollars to book a flight from the USA. Who knows if the causes for the delay of the liquidation sale will cease (prospect of eternal postponment). Do you really want to know the name of this store?

Please disclose the name and address of the store you refer to. If it's within commuting distance some audiogoners might take advantage of the sale. Always an opportunist.

sugarbrie is quite right on the marketing questions, which i rarely answer. some companies, tho, send you gifts when you register. i got a dvd, for example, when i registered my loewe crt.

as to "insolvency sales" : that's a rarely used description in the us. i've seen such sales advertised in the uk and canada. generally, a "true" insolvency sale would be held in conjunction with a bankruptcy. in such cases the trustee or debtor-in-possession hires an auction company to conduct these sales. they are usually open to the public but many have restrictions on bidding, requiring, for example, "lot" bids rather than individual "piece" bids. more and more liquidation sales are done on the internet. there are at least a couple of federal gov't approved sites used for specifically for this. the "insolvency" sale your dealer is advertising, slawney, may be a simple "going out of business" sale. such sales may, BTW, be subject to local gov't regulations, usually prohibiting the kinds of stores that "go out of business" for a period of a year or more. i would try to get your warranty cards from this dealer before he shutters his place for good. -kelly

Those mail-in warranty cards usually have one purpose. All those questions they sometimes ask are for gather marketing intelligence. Even a simple name and address is useful to marketing.

rcprince, esp. kelly, thanks for the expert advice, and one question. How does an insolvency sale work? Is it open to the public or only to trade professionals? Does it work wholesale or retail, like an auction or something else? Is the equipment sold at wholesale or best offer? Is most of the equipment returned to the distributors?
Re. the warranties. The equipment I bought from this store--Audiomeca CD Transport, Z-Systems digital preamp, NBS cables (with a supposed life-time warranty)--will hopefully last until the warranty expires. Whenever this dealer sold equipment, he always retained the warranty cards, actually took them out of the boxes before the customer got the equipment (I never saw a warranty card with anything I bought from him, and everything was new, at retail price). When confronted on this, he would say that he needed to keep the warranty information for his records "to see when the warranty ran out in case of necessary repair." I was always instructed to bring the equipment to him if it failed. I always thought: "what if I move to another city?" but shrugged aside the doubts so as not to cause a stir. He lost his authorized dealership status for many if not all of the lines he carried as things declined. Also, I used to trade in things with him and get cash-equivalent coupons or vouchers for later purchases. Thank god, I used them up recently, as these easily totalled into the thousands at times. Imagine having thousands of dollars in coupons for equipment from a shop that no longer exists! What was really uncanny was that he never talked about his financial troubles openly (even when he could not deliver a set of cables to me for 9 months). I think that his intense passion and curiosity about new equipment led him to buy more than he could sell. It used to be the best shop in town. Now the contents are being sold off on Monday.

Nice (and generous) post Cornfed. Craig

Thank-you for the info Kelly. I guess I better read the fine print a little better in the future. Bob

like it or not, guys, this is actually a legal question. and, before you kill all the lawyers, permit me, please, to offer some gratis (read:"rare") legal advice. under the laws of the usa, a manufacturer may impose "reasonable" conditions upon its warranty obligations, including a "registration" requirement of a "reasonable" nature within a "reasonable" period. some sellers, as supposed favors to their customers, retain warranty registration cards, usually for the purpose of falsely and fraudulently "extending" the warranty period. this may seem to be righteous to buyers but may, in fact, limit or obviate the warranty rights otherwise applicable. my advice is this: (1) if a manufacturer imposes warranty registration obligations, honor them; (2) a dealer's "lifetime" warranty is only as good as the lifetime of the dealer, not yours; (3) if you're in the same situation as slawney, explain your situation to the warrantor and pray that its got an ethical sense to honor your "warranty," irrespective of legal obligations to the contrary; and, (4) don't trust ANYONE to tell you that the terms of a warranty registration is "no big deal" and can be avoided. -kelly

I asked my favorite dealer that question when I was in a similar situation and he assured me that the warranty is good whether the card was sent in or not. Proof of purchase date is all that the manufacturers require. I have not yet had to test this....but it seems reasonable to me. So I keep all the receipts like you did and hope.

If they were an authorized dealer for the products in question, selling with a manufacturer's warranty (i,e., not a grey market item or used item without a transferable warranty), the fact that the warranty card might not have been sent in shouldn't matter, and the manufacturer should honor the warranty--you should check the warranty information that came with the equipment for the limitations on the warranty, though, to make sure they're not applicable. The dealer's promise to make all repairs, of course, won't be too helpful at this point. A sad story, unfortunately. My local dealer went through some tough times during the last recession, but weathered the storm and is now thriving, albeit primarily through home theater and multiroom installation work.