Corporate is also claiming that they don't allow stores to take on consignment deals, contrary to their franchise agreement explicitly allowing franchise owners to take on consignment deals.

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munk-a 2 hours ago | parent | next [-]

I have absolutely no doubts a court would consider it impossible to transfer goods under consignment to a different entity free of the burden of the consignment contract. So the corporation trying to reach into the franchise to grab these goods without honoring the contract is absolute BS and they should be dragged through the mud over it.

The unfortunate loophole here is that, potentially, by shutting down that franchise in a bankruptcy the corporation may end up being preferred for being made whole on debts relative to the consigner. Bankruptcy is complicated so while I am pretty sure any remaining goods from the consignment would be returned to the original owner the proceeds from sales that were successfully made might end up in the pocket of the corporation.

Personally, I absolutely loathe consignment. It is an incredibly complex agreement with a lot of weird edge cases about deprecation of goods and the duty to seek a good price that get complex quick. If you have goods like this and can find a store that will buy your goods in bulk you should be very careful in considering how much you care about the price difference between that bulk price and the percentage they list for consignment. A single transaction is usually much cleaner and easier for both sides and in this case (trying to pay for medical costs) having the money immediately can be quite attractive.

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preinheimer 7 minutes ago | parent | next [-]

> I have absolutely no doubts a court would consider it impossible to transfer goods under consignment to a different entity free of the burden of the consignment contract.

Reminds me of the whole "disney must pay" debacle.

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BobAliceInATree an hour ago | parent | prev | next [-]

The problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very little and they have to hold the inventory.

	▲	munk-a 43 minutes ago \| parent [-]
		Yup, if I worked in a field where consignment was an option I'd refuse to do it - it's a huge headache. So I'd absolutely believe that the corporation has a policy against accepting consignment offers and might have a case to recover damages or something against the original franchisee. But the way they've handled this situation still appears to be atrocious. Lets say you consigned 200k at a 10% commission, 50k sold under the original franchisee and you were paid 30k already. If the franchise transferred and the company wanted out there should be an exit[1] in the contract to pay the additional 15k and then return the goods to the original owner. I think it's important to remember this sort of an option was always on the table. 1. Even if the original consignment contract was poorly drawn up without a clear exit clause I think it'd be reasonable to expect a resolution somewhere close to this in mediation.

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throwaway85825 an hour ago | parent | prev [-]

In bankrupty a court appointed liquidator can seize assets and sell them to repay creditors. Of course none of this happened here.

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jimnotgym an hour ago | parent [-]

They can't sieze consignment stock though?!?

	▲	throwaway85825 an hour ago \| parent \| next [-]
		The court can do almost anything. Its happened before. https://www.cozen.com/news-resources/publications/2020/is-yo...
	▲	munk-a an hour ago \| parent \| prev [-]
		"Can't" is a really bad word to use and I am not certain if "they" here are the corporation or the liquidator. If you're talking about the corporation I think that any sensible neutral party would probably come down on the side that the corporation has no entitlement to those goods. If you're talking about the liquidator then the goods were held by the franchise so if it went through bankruptcy those goods would be under consideration by the steward - I think they'd usually find that the original owner should be entitled to the goods since they're relatively non-fungible. The proceeds from sold goods are likely a more complicated answer since money is fungible and divisible. I could accept that there would be scenarios where a steward would think that the corporation should recover a portion of the proceeds.

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askbjoernhansen 2 hours ago | parent | prev [-]

The (former) franchise owner shared their contract with BAM that explicitly allowed consignments.