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Apple sued down-under

by on07 May 2009

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Claims it caused a retail chain to collapse


Fruit themed
toymaker Apple has been sued down under for causing a computer retail chain to collapse.

The retail chain called Buzzle, which collapsed in March 2001, and its liquidator is suing Apple for $57 million. Apple acted as a "shadow director" of Buzzle, or effectively controlling the company while it was insolvent from January 2001 onward, the plaintiffs say.

Buzzle was formed in September 2000 when six of Apple's resellers, accounting for roughly 30 per cent of Apple Australia's revenues, merged their businesses in the hope of forging dotcom riches in a $110 million stockmarket float.

When the outfit went bust it owed $30 million to 866 creditors. Apple, its major supplier, was owed $20 million and it the court has heard how Apple executives were controlling Buzzle's board because the Buzzle directors didn't know how to run the company, and didn't have the right skills or an accounting system that worked properly.

Apple needed Buzzle to continue trading between January and March 2001, when it was already broke, in order for Apple to attempt a demerger of the resellers. Apple concedes Buzzle may have been insolvent in January, but denies that its executives acted like shadow directors.
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