IS.GROUP LAUNCHES $1M COURT BATTLE

  • Print
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • banner-01-26-17b
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • 2toner1-2
  • clover-depot-intl-us-ca-email-signature-05-10-2017-902x1772
  • 4toner4
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • ces_web_banner_toner_news_902x1776
  • ncc-banner-902-x-177-june-2017
Share

IS.GROUP LAUNCHES $1M COURT BATTLE

 user 2006-08-22 at 1:00:00 pm Views: 56
  • #16226

    Dealer group launches $1m court battle
    Troubled
    is.group has launched a legal action against “delinquent dealers” it
    claims owes a seven-figure sum. The move follows months of wrangling
    which began with the launch of the independent network’s contentious
    RDC programme.The ongoing feuding at is.group is set to reach the
    courtrooms after the independent dealer network launched a series of
    legal actions against 62 former members last month.The dispute centres
    around an undisclosed seven-figure sum is.group claims it is owed for
    merchandise the former dealers purchased and past due fees it is argued
    remain unpaid.Some fear the dramatic escalation in the stand-off could
    cause severe damage to the network although group chairman Jordan
    Kudler told OPI he still hoped an amicable settlement could be agreed
    and many of the dealers would return.”I understand that this will more
    than likely force a strained relationship between dealers and that
    upsets me,” he added. “But we have an obligation to do what is in the
    best interest of our group.”The frustrating part is that they’re not
    hurting is.group, they’re hurting their fellow dealers and I don’t
    think the independent dealer channel can afford to do that any
    longer.”The dispute among the US dealer community was sparked after
    is.group introduced its controversial regional distribution centre
    (RDC) programme in 2004.The scheme was created by the is.group board
    and was designed to offer dealers a more efficient way to buy direct.
    The RDC programme allows the independent dealer to purchase from
    multiple manufacturers in a mixed pallet. Through is.group’s programme,
    which operates through three warehouses, dealers can buy from 23
    manufacturers and 2,300 SKUs in one order, rather than having to raise
    23 different purchase orders and pay a pre-paid minimum that drains
    dealers’ cash.But despite the apparent advantages, 182 dealers walked
    from is.group, many of which were stockless, because they were not
    prepared to pay the required fee for a programme that they claimed
    didn’t work for their business model. The loss accounted for 11.4 per
    cent of the group’s direct buy.Speaking to OPI, chairman Jordan Kudler
    added: “I believe that some dealers who felt they were due rebates held
    back paying for merchandise and/or fees as a means of offsetting what
    they felt they were owed. Nevertheless they purchased merchandise and
    didn’t pay for it and now those costs are being absorbed and incurred
    by other dealers in the group.”After exhausting every attempt to
    resolve the issue, the Board of Directors decided to offer the
    delinquent dealers a settlement for a lesser amount than what was owed.
    Many of the dealers turned the offer down. At the last AGM we explained
    the situation and it was actually the overall membership that truly
    endorsed this action. There wasn’t a single member that I can recall
    who didn’t want us to collect the monies – they were extremely upset
    and disappointed.”Kudler maintained that had the group not faced the
    debts from the situation, is.group would have been “significantly”
    closer to breaking even in 2005, and would have been able to begin the
    process of paying members back for the investment that they made.He
    said: “We really must begin working together to find solutions to
    enable us to increase market share. Taking money out of the pocket of
    fellow dealers by not paying for product or membership fees isn’t the
    solution. It’s unfortunate that this has occurred, but their legal
    obligations must be met.”It is our hope that those who have received
    their suits will not want to take this any further so that we can put
    this all behind us and move forward.”Kudler said some dealers have
    already settled their cases, and added: “I don’t want to see any dealer
    have to incur legal expenses that would be necessitated by this. Nobody
    likes to initiate a law suit. And it certainly doesn’t lend to a
    positive relationship. This is money owed to is.group members, it’s
    money that is.group needs to be able to operate.”As time goes on, some
    dealers may realise that they made some decisions that were
    understandably emotional but not necessarily well thought-out at the
    time. And some of them made decisions that perhaps were thought-out but
    the model didn’t work well for them. We lost many dealers in the last
    year but we only have 62 law suits pending at this point, which
    indicates that many dealers who left understood what their obligations
    and responsibilities were and they honoured them. For the remaining 62
    dealers to take a position that it’s acceptable to walk away from their
    financial and legal obligations simply because they have a
    philosophical disagreement isn’t necessarily the right choice.”And to
    make your fellow dealers, who you have been co-members with for many
    years, incur those expenses is even more frustrating and
    irresponsible.”Many of the dealers did not fully understand the RDC
    programme when it was launched – they did not understand the mechanics
    of how the expenses of the programme were to be covered.We would very
    much like to have this resolved. This is not an act of retribution.”