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In re G.S. Distribution, Inc.

331 B.R. 552 (2005)

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In re G.S. Distribution, Inc.

United States Bankruptcy Court for the Southern District of New York
331 B.R. 552 (2005)

SH

Facts

G.S. Distribution, Inc. (GSD) (debtor) operated a retail jewelry store on Madison Avenue in New York. Pursuant to an exclusive distribution agreement, GSD imported, distributed, and sold in the United States jewelry manufactured from Repossi Diffusion S.A.M. (Repossi) under the Repossi trademark and as a Repossi boutique. The jewelry was received from Repossi on a consignment basis and, once a piece was sold, Repossi issued an invoice to GSD for the wholesale purchase price. But GSD never in fact paid Repossi for any of the jewelry it invoiced, which caused Repossi to initiate suit against GSD for breach of contract, conversion, and trademark infringement. The judge in that case enjoined GSD from using the Repossi trademark, from holding itself out as a Repossi boutique, or from selling any jewelry received from Repossi. GSD thereafter filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Repossi was the primary creditor with a claim of approximately $5 million, which represented the wholesale value of the jewelry sent to GSD on consignment and then in its possession. The only other substantial creditor was Giuseppe Scavetta, who indirectly owned GSD, with a claim of approximately $1.5 million.

Rule of Law

Issue

Holding and Reasoning (Gropper, J.)

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