Chpt 7 sole proprietor, discharged in June, have inventory assets-buy back inventory?

[purplepea]

Hello!
I had a sole proprietor gift shop that we had to close. We filed a personal chapter 7 which was discharged in June, but case still not closed as I have non exempt inventory.

The wholesale cost of my remaining inventory is approx 26k. It consists of gifty type items, magnets, paperweights ornaments, tiles, wind chimes, some stemware, pottery & glass stuff--

The trustee finally came by today to look at it and said they would come with a truck and just load it and take it. He did make a comment that I must have had "quite a markup" for 26k worth,--the inventory is nice quality but they didn't actually look in any of the boxes. I took that as he wasn't that impressed, or that he thought the 26k was the retail price, I'm not sure. I listed it as wholesale cost in my paperwork.

I asked about buying it back, he said to make an offer through my attorney, and they would counter or not.

Question-what percent on the dollar should I offer? If he were to go through a liquidator, what' % of wholesale cost is common, and how much in fees does a liquidator usually collect? Are they usually willing to take a payment plan and for how long would be reasonable?

Thanks!

[tyson24]

They do not really want to try and get rid of it. They want you to by it back so they do not have to tinker with it. I would start low, low, low. I would offer them $2500 and work up from there.

[purplepea]

Have you heard of them taking that low of an offer? It sounds great--

[drowning123]

I would start at even $1,000. It's just a start, then maybe they'll counter $2,000. You never know. They don't want your stuff.

[tcreegan]

Hi purplepea,

Liquidating inventory can be a real pain. The old fashioned public auction typically gets you pennies on the dollar. Companies specializing in liquidation inventories range from Lord only knows to straight up con artists. The good ones look at your inventory, make an offer, and ship it away. These offers are highly variable, depends on market, demand, active buyers, etc. Costs typically range from 20% to 80% You can sell small lots on Ebay, but there is a large time investment, plus shipping costs.

Now we play the guessing game: what method will the trustee use?

Worst case (for trustee) would be around a 5-10% return, $1,300 to $2,600 on 26K inventory

Worst case (for you) would be around an 80% return, $20,080 on 26K inventory

I would start out with an offer for $1,300 and set 13K as a maximum ceiling. As the trustee counters, pry for details on his liquidation methods.

After you settle on a number, you can ask to break it up into payments.

Good luck with your negotiating!

Tom in Colo





Selling small lots of inventory on Ebay seems to be the best return, but is time consuming and has shipping costs.

[purplepea]

Thanks Tom, when I talked with my attorney today re: a $1000 to $2000 offer, he seemed to think that the trustee would wonder why I valued the inventory so high in my bk filing (for value I used my actual cost of 26k). I got the feeling that he doesn't deal much with this type of issue. He said he would call the trustee and kind of feel him out regarding where his thoughts on the value lay, etc.

I should say that I'm in Maine (probably not a lot of local action on buying the inventory), the trustee was definitely not gong to abandon, but he is stretched real thin as there aren't many trustees here in general (only 2 places to file in the state!).

Thanks