GE Lenders Seek to Seize Inventory from Sixth Avenue Electronics

A federal judge set a hearing for March 31 as GE Commercial Distribution Finance seeks to seize inventory from Sixth Avenue Electronics after the retailer defaulted on a $6.37 million payment. U.S. District Court Judge William Martini, Newark, N.J., scheduled a hearing on a proposed court order to seize inventory from Sixth Avenue. Sixth Avenue has rapidly closed stores in recent weeks, leaving the Philadelphia market and shrinking to 10 stores from 19 at its peak. Sixth Avenue is holding $5.5 million inventory as part of a four-year-old financing agreement with GE. GE sued Sixth Avenue March 14 for breach of contract.

"It is imperative” that GE “recover possession of the inventory as soon as possible so that it can proceed with the orderly disposition of it in a commercially reasonable manner prior to any further sales to innocent third parties of the borrower,” GE said in court documents. If the inventory continues to be sold without Sixth Avenue making payments to GE, the lender will “suffer irreparable harm,” the company said. Sixth Avenue officials have declined to comment.

GE notified Sixth Avenue Feb. 18 that it defaulted on the loan by failing to make a $6.36 million payment that including $6.33 million in past due billings and $31,837 in interest, GE said. GE also sent a proposal to Sixth Avenue to restructure the debt, GE said. GE told Sixth Avenue March 4 a second time it was in default, the company said. Sixth Avenue “failed and refused” to make past-due payments or agree to restructure debt by March 11, GE said.