Woodworkers Warehouse worthless gift certificates

[jonny poika]

Is anybody else having a hard time trying to spend their gift certificates at WW? They claim they don't have to honor the certificates because their stock was being sold by liquidators.

[B a r r y B u r k e J r .]

I don't have a certificate, but they have a sign on the local store's front door saying they don't accept them. According to the local employees, who are now more helpful than they ever were before, a bank appointed trustee is in charge now.

Perhaps someone here is knowledgeable about bankruptcy and can explain more?

FWIW, the Wallingford store looks like a mob stripped it. The funny part is that even at 10% off, most of their prices are higher than Tool Crib and Tools-Plus, the latter's brick an mortar store is only

20-30 minutes away.

Barry

[Kevin Craig]

When you've got a gift certificate from a business that's gone under, you're pretty much out of luck.

WW would be obligated to accept their gift certificates, but the receivers aren't. The GC is a debt they owe to the holder, but it's way down the list of creditors to be paid.

Kevin

[Tom Kohlman]

Suspect you're correct. Kinda sucks though. The purchaser of the GC has in effect granted an interest free loan to WWW . They give cash to WWW which only comes due when the GC is redeemed and worse yet there is a profit margin involved so WWW could "pay-off" the debt with less out-of-pocket cash than they received. However the other creditors (who got interest on their loans) make sure they get first dibs.

Timing of the liquidation is suspicious and I have to wonder if it wasn't to get some extra cash in the door via GC sales in the run-up to the Christmas season, knowing full well that they wouldn't have to honor them. My habit of shopping on Dec 24 has just been given legitimacy.

Saying all that, I seem to recall that some states might give priority to GC holders.

[rllipham]

If these were sold just prior to the receivership and the store new the GC were being issued there may be some fraud.

[Mark Jerde]

In this context, what is "GC"? Thanks.

-- Mark

P.S. In the other groups I frequent RAS is Remote Acess Server and DC is Domain Controller. GC has two common meanings, Garbage Collection and Global Catalog.

And we all know PMS stands for Preventive Maintenance Service. ;-)

[Wood Butcher]

Note the last 2 words on the subject line.

Art

[Mark Jerde]

Duh.... Thanks! Once you know the secret handshake...

-- Mark

[David Ewers]

as a holder of a gift certificate you are a unsecured creditor. Basically you are screwed.

[clutch]

Quality Farm and Fleet did the same thing a year or two ago. Best gift certificate is a personal check.

Wes

[JR]

And that would be the classic definition of an unsecured creditor.

-JR

[JR]

Possibly, but good luck getting someone to pursue the case.

Proving intent would be difficult at best, and no prosecutor is about to waste his time on a bunch of $25-$100 certificates.

After two years, they haven't even charged any of the Enron bastards.

-JR

[Roy Smith]

Yeah, and some routers spin carbide while other routers spin packets. Sometimes when I look at the subject lines, I get confused about which group I'm reading :-)

[Roy Smith]

Priority over what? There's a lot of creditors lined up and they all have different priorities.

It's pretty much a given in any bankruptcy that payroll comes first. The employees may get screwed out of their pension plans, but they should at least get paid for every day they worked.

Taxes are pretty high on the list after that. Secured debt is probably next, followed by unsecured debt. Holders of common stock are last in line. General obligation bonds and preferred stock come before common stock, but I'm not sure where they fall relative to other things. Not sure where the above mentioned pension plans would fall either (a good reason, BTW, to prefer employers with external 401k plans; look what Bethlehem Steel ended up doing to their workers).

About the most I could imagine a state doing is declaring that gift certificates are secured rather than unsecured debt. But, if there's nothing left after the payroll and taxes are paid, you may still end up with some worthless paper.

[Mark & Juanita]

Not because nobody is trying:

[Steve Jenness]

Based on a Business Review article, this is not true.

"Following input from the attorneys general of New York, New Hampshire, Connecticut, and Massachusetts, the federal bankruptcy court for Delaware has ordered that outstanding gift certificates and credit slips amounting to $680,000 be honored throughout the bankruptcy proceedings, according to Spitzer. "

[mttt]

Don't it just suck when your app server goes comatose for a few seconds while the GC runs?

[Mark Jerde]

Yup. But managing objects is easier -- ignore 'em. ;-)

At least now there's an explaination for the pauses...

-- Mark

[RKON]

It sounds like Lay's Play came right out of Dick Chenney's Secret Energy Meeting playbook. The only difference is that Chenney never gave up his notes and etc..

[RKON]

Great Post !!! I guess he should contact his State Attorney General's office if they do not honor the GC.