Guildmaster Files Chapter 11 Following Indictment
On Dec. 12, 2012, the company was indicted for allegedly affixing shipments of lamps, valued at $900,000, with counterfeit UL stickers and filed for Chapter 11 Reorganization to restructure debts incurred after the product seizures.
 

GuildMaster Inc. has filed suit in U.S. Bankruptcy Court for the Western District of Missouri for the return of 5,150 lamps manufactured and shipped a year ago. The federal indictment calls for forfeiture and destruction of the lamps, which GuildMaster has valued at $900,000 and the government has valued at $1.9 million. 

The GuildMaster suit is part of the petition for Chapter 11 Reorganization filed on Dec. 13, 2012. On Dec. 12, 2012, the company was served a federal indictment on nine counts related to the December 2011 shipments of lamps bearing a removable, unlicensed sticker indicating a UL trademark, which was applied without the knowledge or approval of GuildMaster’s U.S. management team. The lamps were manufactured by Dongguan Yangming Hardware Crafts Limited, a lamp factory purchased by GuildMaster in November 2011. 

“The employees of the Chinese plant decided indiscriminately and incorrectly – without U.S. personnel or U.S. management knowledge – that the lamps needed to have the UL-certified stickers on them,” says Steve Crowder, GuildMaster CEO. “We first learned of the offending stickers on January 27, 2012, the day after the seizure and immediately agreed that the removable stickers should not be on the lamps and had the stickers removed and destroyed in China.”

GuildMaster lamps are constructed of UL-certified components and the safety of the lamps was never in question. The stickers are considered counterfeit because GuildMaster does not hold a license for UL-certified lamps.

“The basis for this motion to return the lamps is that the seized lamps are property of the ‘estate’ under bankruptcy code and that because removing the sticker eliminates the issue, the lamps should be returned to GuildMaster to sell in order to pay our debtors under bankruptcy protection,” Crowder says. “Since the seizure we have manufactured and shipped thousands of lamps – sans the counterfeit stickers – with no further audits or government inspections. It makes no sense to destroy the lamps when removing the stickers solves the problem.”

The suit filed by GuildMaster includes motions to:

-The right for GuildMaster to inspect all of the lamps to clarify whether they actually bear the counterfeit stickers and therefore were seized improperly.

-Return of the 5,150 lamps after the stickers are removed to GuildMaster for sale to its customers.

“We have operated with total integrity and transparency throughout this ordeal,” Crowder says. “After much thought, we filed suit against the government for return of the lamps because doing what is right is more important than the bottom line.”

GuildMaster is conducting business as usual and shipping all products as it moves forward under Chapter 11 bankruptcy protection. 

The company is following its normal schedule of product introductions in its permanent showrooms at the Atlanta, Dallas and Las Vegas winter markets as well as at the High Point Market in April. It continues to manufacture products without disruption at its plants in Indonesia and China.

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