2004-02-13 by Editor P.O.V. Image Service
First, I'm not a practicing attorney, so this is my own personal
opinion, and NOT intended as legal advice. It only lays out what I
understand the law is and how I PERSONALLY might react. Your mileage may
vary.
Now for some relevant info from my personal perspective for IJM
customers.
My understanding, after some research, is that anyone who buys after a
Chapter 11 filing stands in no better position vis IJM than does any
creditor, should IJM for financial reasons be unable to fulfill the
order (that's part of WHY people need to know about the filing AND part
of why it is public). That means if they charge someone and cannot
deliver, you'd likely only get pennies back on the dollar (as did those
with PanAm and Midway Express airline tickets). Of course, that would
not be relevant IF IJM only charges your credit card when product
actually ships.
I have no idea how/when IJM charges orders, but I assume, like most
online vendors they do not charge the client/customer until product is
shipped to them. If that's NOT the way they currently do business, I
personally, would not place an order without a commitment from IJM NOT
to charge my card until the products shipped.
As for Credit Card protection of a customer's order, my understanding is
that such coverage in cases of a vendor filing for bankruptcy is very
limited, because: Chapter 11 filings are public, the customer therefore
could have been informed (it may be a legal fiction, but that's the
argument), and once a Chapter 11 filing is made, the buyers and vendors
are assumed to be on notice that the Chapter 11 could become a Chapter 7
(liquidation) filing if the Chapter 11 plan is not approved by the
filing parties creditors and/or the court. So, before placing further
orders, I'd probably check with my credit card company, explaining that
I know of the Chapter 11 filing, and ask them whether my purchase is
still protected (Midway Express and PanAm customers who had post Chapter
11 filing tickets only received pennies on the dollar back AFAIK) to its
full value.
Please understand, this is not to say that IJM would ever purposely take
orders they knew they could not fulfill. That would be fraudulent, and
I don't think they are dishonest. Reality is that they could honestly
intend to fill orders and find that, as a result of the filing, their
vendors/suppliers simply refuse to deliver expected product to them that
they need to fulfill the orders (especially on credit). Such a situation
can affect ANY firm who files for Chapter 11 (i.e. in some Airline
instances they had to stop flying temporarily or permanently simply
because no-one would sell them any more fuel). Often, the filer signs a
reaffirmation agreement (a simple outline of that is at:
<http://www.mauilaw.com/article5.htm>) to continue existing
relationships with preferred suppliers, providers of equipment bought on
time, etc. to avoid exactly these types of issues.
To put it all in a nutshell. Once a vendor files for Chapter 11 it's
"Caveat Emptor.." (buyer beware)
Keith Krebs
"Just some guy," caretaker of the Multiverse's largest EPSON printer
User Community (highly recommended by Vogon Poets and MegaDodo
Publications), at:
http://groups.yahoo.com/group/EPSON_Printers/
and the Multiverse's largest Canon printer User Community at:
http://groups.yahoo.com/group/Canon-printers
"For the rest of you out there, the secret is to bang the rocks together
guys"