Bangladesh’s readymade garment factories received $6.3 million against cancelled orders worth $40 million after filing a lawsuit against Sears, an American clothing brand.
A total of 32 factories of 21 vendors received orders worth $40million from Sears during January-March, 2020 and the buyer cancelled all the orders in April amid the COVID-19 crisis.
By the time the orders were cancelled the factories had shipped products worth $22.7 million.
According to the sector people, suppliers filed a lawsuit with a USA court against Sears as soon as the company applied for bankruptcy in October, declining to make payment for the already shipped products.
After filing the case, the suppliers engaged in an off-court settlement over the payment with Transformco, a private company, set up by American billionaire Edward Lampert’s ESL Investments to bring Sears and Kmart out of bankruptcy.
Md Iqbal Hossain, managing director of Patriot Group, on Sunday told New Age that after the off-court settlement Sears received products from ports and paid $6.3 million to the suppliers in November.
According to the settlement, suppliers would get 50 per cent of selling prices of the products and Transformco would get the remaining 50 per cent, he said.
‘We have received $6.3 million so far and as per the calculation Bangladeshi suppliers would get $1.6 million more in the coming months,’ Iqbal Hossain, one of the suppliers of Sears, said.
Forbes magazine on Saturday reported ‘Bangladesh garment makers score victory against Sears in $40 million lawsuit.’
Iqbal Hossain termed the report as misleading and said that suppliers had been forced to go for a partial settlement.
‘Out of $40 million received orders, we shipped products worth $22.7 million and readied products worth $11.9 million and raw materials worth $6.4 million remained stockpile in the factories,’ he said.
Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association, said that it was a partial achievement adding that it had established manufacturers’ rights to fight against injustices.
‘Sears has been the longest dragging case from the pre COVID period. Starting from bankruptcy till date they have been unwilling to settle our dues,’ she said.
Rubana also said that the report carried out by Forbes in this regard was ‘not true at all’.
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