And the Battle Continues – Nu-Kote & Office Depot
Nukote International, Inc. filed a lawsuit against Office Depot in Nashville’s U.S. Bankruptcy Court to tune of $217 million stating “egregious fraudulent misrepresentations and breaches of contract” in which Nukote lays the blame of their second Chapter 11 filing in the company’s history squarely on the shoulders of Office Depot.
This past May Nukote and Office Depot severed their 20 year vendor/retailer relationship despite consistent assurances from senior representatives at Office Depot that the relationship with Nukote was secure. The vendor/retailer contract was not due for renewal until July 2010. Nukote had once provided Office Depot with an estimated $85 million in product annually. In the lawsuit Nukote claims Office Depot had not paid them as consistently as they had in the past, then forced Nukote into a bidding war to keep Office Depot’s business. The delay of payments, time and money spent on the bidding war that ultimate resulted in the loss of Office Depot’s business “brought the Debtor (Nukote) to its knees” financially.
Office Depot responded to the filing in a statement which said “Nukote was significantly past due on amounts owed to Office Depot and, in fact, Office Depot still holds a significant receivable balance for Nukote. Indeed, it is not Office Depot that is indebted to Nukote, but it is Nukote that is indebted to Office Depot.”
The statement further says that Office Depot did not breach any contracts with Nukote by changing suppliers. Office Depot claims Nukote stopped shipping product and “This interruption in service caused Office Depot to experience low inventory and out-of-stocks, and ultimately required Office Depot to quickly ramp up inventory with alternate suppliers”. The response goes on to say “Office Depot intends to vigorously defend against Nukote’s allegations and monetary demands. Further, Office Depot fully intends to seek reimbursement for the amounts Nukote owes to Office Depot.”
So I say lean back, kick your feet up and watch the battle rage on in what is sure to be a lengthy fist fight in which no winner may ultimately claim victory. At least it makes for juicy office products industry gossip!
This is our opinion of what actually is happened.
Many years ago in a land far, far away Office Depot investigated their viability in the compatible toner and inkjet cartridge business. NuKote proved they were Office Depot’s solution to this notion and won the business with set contract-pricing, rebate dollars and co-op dollars. The years go by and Office Depot’s employee turn over, increasing pressure to source lower priced product coupled with shrinking margins squeeze Nukote into a no-win situation.
Fast forward to early this year: Office Depot wants their rebate dollars but NuKote doesn’t want to pay because they’ve discounted their product so far below contract prices it makes them ineligible for rebate dollars (unless they give it away for free). Office Depot says “No…!” we want our rebate dollars or we’ll take the money from our payables to you. Now Nukote is being short paid on outstanding invoices. Subsequentially Nukote starts to see the writing on the wall with their bank and the serious decline in A/R from Office Depot. Pushed to the brink, Nukote files for protection in bankruptcy court. And inside bankruptcy, Nukote files claim against Office Depot for $217 million in damages putting the blame for their second Chapter 11 filing in the history of the company squarely on the shoulders of Office Depot.
Heavens, how’d we get here! Pause and take a breath! Imagine if the top dogs of both companies sat down face to face, human being to human being and talked it out. Could things have been salvaged? Would both companies have to be in such horrendous situations today? Who knows because obviously egos got in the way. So where are we in present day? Well, there’s a full fledged dog fight happening to determine who’s responsible for who did what to who and how much its all worth. More to come as it unfolds.
So who did wrong, Office Depot or Nukote?
Another Bankruptcy Coming Soon
Word on the street is that another Office Products company is on the verge of liquidation due to financial issues. Vasanta, formerly called Kingfield Heath, in 2007 and then merged with computing supply company ISA and Supplies Team could be heading into some financial troubles.
Another Bankruptcy Coming Soon
Word on the street is that another Office Products company is on the verge of liquidation due to financial issues. Vasanta, formerly called Kingfield Heath, in 2007 and then merged with computing supply company ISA and Supplies Team could be heading into some financial troubles.
From The Nashville Post – Nukote Files for Bankruptcy Protection
The Nashville Post is referencing to this post about Office Depot and Nukote – Who Fires Who?
Printing supplies maker Nukote International Inc., which has a distribution center in Franklin, has filed for Chapter 11 reorganization in Nashville’s U.S. Bankruptcy Court.
Nukote, headquartered in Plano, Texas, disclosed that it owes some $14.5 million to its top 20 unsecured creditors. It stated that its assets are worth about $86 million, while its liabilities stand at approximately $79 million. Four subsidiaries filed accompanying Chapter 11 petitions. The five petitions are available here (large .pdf file), and a related filing with further details is at this link.
The filings say Nukote owes lender CIT Group about $30 million on a secured financing package. The company owes $2.6 million to its largest unsecured creditor, Grupo American Industries S.A. de C.V., of Chihuahua, Mexico. Other major creditors are located in Canada, Hong Kong, Vietnam and across the U.S.
Nashville’s ABF Freight System Inc., the only local company on the list of creditors, is owed $189,000.
This is Nukote’s second trip through the local bankruptcy court. It filed here under Chapter 11 in 1998, when it was a publicly traded company, and emerged in 2000 with private equity firm Richmont Holdings of Dallas as its majority owner.
“There will not be any job cuts as a result of the filing,” said Russell Mack, a spokesman for Richmont. “We will continue to conduct business as usual.”
Nukote is one of the world’s largest remanufacturers of inkjet and laser toner printer cartridges. It currently employs 29 people at its Franklin facility, which local economic development officials used to list as one of the city’s largest employers with a workforce of about 250 as of 2005.
Worldwide, the company employs about 1,100, according to one of its filings yesterday. As recently as November 2007, it said in a press release that it had more than 3,000 employees.
In April, an office-products industry blog reported that Nukote’s status as a major supplier to retailer Office Depot had come to an end, resulting in significant job losses.
Frank J. Wright, with the Dallas firm Wright Ginsberg Brusilow, is lead counsel for Nukote. Craig Gabbert of Nashville’s Harwell Howard Hyne Gabbert & Manner, who was involved in the company’s 1998 reorganization, is serving as local counsel in the new case along with Harwell partner Barbara Holmes.
From The Nashville Post – Nukote Files for Bankruptcy Protection
The Nashville Post is referencing to this post about Office Depot and Nukote – Who Fires Who?
Printing supplies maker Nukote International Inc., which has a distribution center in Franklin, has filed for Chapter 11 reorganization in Nashville’s U.S. Bankruptcy Court.
Nukote, headquartered in Plano, Texas, disclosed that it owes some $14.5 million to its top 20 unsecured creditors. It stated that its assets are worth about $86 million, while its liabilities stand at approximately $79 million. Four subsidiaries filed accompanying Chapter 11 petitions. The five petitions are available here (large .pdf file), and a related filing with further details is at this link.
The filings say Nukote owes lender CIT Group about $30 million on a secured financing package. The company owes $2.6 million to its largest unsecured creditor, Grupo American Industries S.A. de C.V., of Chihuahua, Mexico. Other major creditors are located in Canada, Hong Kong, Vietnam and across the U.S.
Nashville’s ABF Freight System Inc., the only local company on the list of creditors, is owed $189,000.
This is Nukote’s second trip through the local bankruptcy court. It filed here under Chapter 11 in 1998, when it was a publicly traded company, and emerged in 2000 with private equity firm Richmont Holdings of Dallas as its majority owner.
“There will not be any job cuts as a result of the filing,” said Russell Mack, a spokesman for Richmont. “We will continue to conduct business as usual.”
Nukote is one of the world’s largest remanufacturers of inkjet and laser toner printer cartridges. It currently employs 29 people at its Franklin facility, which local economic development officials used to list as one of the city’s largest employers with a workforce of about 250 as of 2005.
Worldwide, the company employs about 1,100, according to one of its filings yesterday. As recently as November 2007, it said in a press release that it had more than 3,000 employees.
In April, an office-products industry blog reported that Nukote’s status as a major supplier to retailer Office Depot had come to an end, resulting in significant job losses.
Frank J. Wright, with the Dallas firm Wright Ginsberg Brusilow, is lead counsel for Nukote. Craig Gabbert of Nashville’s Harwell Howard Hyne Gabbert & Manner, who was involved in the company’s 1998 reorganization, is serving as local counsel in the new case along with Harwell partner Barbara Holmes.
From The Nashville Post – Nukote Files for Bankruptcy Protection
Updated info about Office Depot and Nukote legal issues on this new post.
The Nashville Post is referencing to this post about Office Depot and Nukote – Who Fires Who?
Printing supplies maker Nukote International Inc., which has a distribution center in Franklin, has filed for Chapter 11 reorganization in Nashville’s U.S. Bankruptcy Court.
Nukote, headquartered in Plano, Texas, disclosed that it owes some $14.5 million to its top 20 unsecured creditors. It stated that its assets are worth about $86 million, while its liabilities stand at approximately $79 million. Four subsidiaries filed accompanying Chapter 11 petitions. The five petitions are available here (large .pdf file), and a related filing with further details is at this link.
The filings say Nukote owes lender CIT Group about $30 million on a secured financing package. The company owes $2.6 million to its largest unsecured creditor, Grupo American Industries S.A. de C.V., of Chihuahua, Mexico. Other major creditors are located in Canada, Hong Kong, Vietnam and across the U.S.
Nashville’s ABF Freight System Inc., the only local company on the list of creditors, is owed $189,000.
This is Nukote’s second trip through the local bankruptcy court. It filed here under Chapter 11 in 1998, when it was a publicly traded company, and emerged in 2000 with private equity firm Richmont Holdings of Dallas as its majority owner.
“There will not be any job cuts as a result of the filing,” said Russell Mack, a spokesman for Richmont. “We will continue to conduct business as usual.”
Nukote is one of the world’s largest remanufacturers of inkjet and laser toner printer cartridges. It currently employs 29 people at its Franklin facility, which local economic development officials used to list as one of the city’s largest employers with a workforce of about 250 as of 2005.
Worldwide, the company employs about 1,100, according to one of its filings yesterday. As recently as November 2007, it said in a press release that it had more than 3,000 employees.
In April, an office-products industry blog reported that Nukote’s status as a major supplier to retailer Office Depot had come to an end, resulting in significant job losses.
Frank J. Wright, with the Dallas firm Wright Ginsberg Brusilow, is lead counsel for Nukote. Craig Gabbert of Nashville’s Harwell Howard Hyne Gabbert & Manner, who was involved in the company’s 1998 reorganization, is serving as local counsel in the new case along with Harwell partner Barbara Holmes.
Who fires who?
Vendors get PO’ed at times, especially if they don’t get paid. But would they fire their largest customer? Message boards have been picking up about Office Depot and their private label vendor on compatible cartridges – Nu-Kote. So did Office Depot decide to switch vendors of their private label compatible cartridges or did Nukote fire Office Depot, their largest customer for delay in payment?
Personally, I remember when Nu-Kote was in bankruptcy about 10 years ago. How quickly they forget. But Nu-kote is not a bank and they will need to protect themselves.
Would Nu-Kote be my vendor of Compatible cartridges, probably not, but I have no idea what their “Strategic Relationship” is with Office Depot. But it was last year Nu-kote decided to cut some costs and let some good people go that managed these relationships.
Voice your opinion….Did Office Depot fire Nu-kote, or did Nukote fire Office Depot? If you were Office Depot, who would be your compatible vendor of choice?
By the way if you sell office supplies try this out.
Who fires who?
Vendors get PO’ed at times, especially if they don’t get paid. But would they fire their largest customer? Message boards have been picking up about Office Depot and their private label vendor on compatible cartridges – Nu-Kote. So did Office Depot decide to switch vendors of their private label compatible cartridges or did Nukote fire Office Depot, their largest customer for delay in payment?
Personally, I remember when Nu-Kote was in bankruptcy about 10 years ago. How quickly they forget. But Nu-kote is not a bank and they will need to protect themselves.
Would Nu-Kote be my vendor of Compatible cartridges, probably not, but I have no idea what their “Strategic Relationship” is with Office Depot. But it was last year Nu-kote decided to cut some costs and let some good people go that managed these relationships.
Voice your opinion….Did Office Depot fire Nu-kote, or did Nukote fire Office Depot? If you were Office Depot, who would be your compatible vendor of choice?
By the way if you sell office supplies try this out.
Who fires who?
Vendors get PO’ed at times, especially if they don’t get paid. But would they fire their largest customer? Message boards have been picking up about Office Depot and their private label vendor on compatible cartridges – Nu-Kote. So did Office Depot decide to switch vendors of their private label compatible cartridges or did Nukote fire Office Depot, their largest customer for delay in payment?
Personally, I remember when Nu-Kote was in bankruptcy about 10 years ago. How quickly they forget. But Nu-kote is not a bank and they will need to protect themselves.
Would Nu-Kote be my vendor of Compatible cartridges, probably not, but I have no idea what their “Strategic Relationship” is with Office Depot. But it was last year Nu-kote decided to cut some costs and let some good people go that managed these relationships.
Voice your opinion….Did Office Depot fire Nu-kote, or did Nukote fire Office Depot? If you were Office Depot, who would be your compatible vendor of choice?
See the recent update of the legal issues of Office Depot and Nukote in this new post.
By the way if you sell office supplies try this out.
