Pass along a news tip by clicking HERE.

Friday, January 19, 2007

National City E-mail: Bank 'Lost Millions' In Clothing Deal

COLUMBUS (TDB) -- A National City Bank vice president said in an internal e-mail this week ''our loss will still be in the millions" in a deal with an Ohio apparel-maker that produced John Deere & Co. branded items. The goods were supposed to be auctioned off today to recoup some of the Cleveland banking giant's losses, but a judge issued an order halting the bidding.

John Deere lawyers said some of the apparel could be counterfeit, or were not up to its standards for quality. The e-mail by Michael D. Davis, identified in court records as a National City vice president, was filed with U.S. District Judge Edmund Sargus, who issued a temporary restraining order blocking the auction for at least 10 days. About 700,000 units of John Deere merchandise was to be sold, including products like men's work wear.

Davis wrote the e-mail Jan. 16 and was exasperated at Deere.

''It is surprising that now after our notice of four weeks ago, Deere now has a problem with the sale. Needless to say we have invested a great deal of time and money preparing for this auction. In our ongoing discussions with the people at XXXX, we believe these goods had been previously approved by Deere, then not approved by Deere. National City had in good faith provided the funds to produce these goods and we now hold them as the secured lender in due course,'' Davis wrote.

"These goods and the remaining receivables will help mitigate our loss, but as you know, our loss will still be in the millions. Inasmuch as Deere certainly was a major contributor to the demise of our borrower due to their lack of consistency in providing apparel guidance and approved to our borrower, it isn't surprising that they would now object. They talk about not wanting to hurt the suppliers, but have gone to great measure to ensure their pockets are filled while creditors have lost millions of dollars. We believe that we have a right to mitigate our loss with the sale of these goods."

National City's Web site is HERE. John Deere is HERE.

The auction was supposed to take place today at the Earth Tones warehouse, 2241 City Gate Dr., Columbus. Deere said it was concerned the branded apparel would wind up being sold at flea markets and swap meets. Deere said its branded products are sold in mid-tier and above stores and the auction could "significantly devalue comparable products being sold at retailers such as J.C. Penney for prices that are ten or twenty times greater. This alone will inevitably hurt the licensing program."

No comments:

Post a Comment