No legal protection for deposits, says Best Buy receiver

"I've got some fairly sad letters," says David Davidson of Coopers & Lybrand, the receiver for Best Buy. "A number of these people had been clearly saving up for some time - kids doing odd jobs such as mowing neighbours' lawns. Funnily, people only seem to get caught when computer companies are involved."

“I’ve got some fairly sad letters,” says David Davidson of Coopers & Lybrand, the receiver for Best Buy. “A number of these people had been clearly saving up for some time — kids doing odd jobs such as mowing neighbours’ lawns.

“Funnily, people only seem to get caught when computer companies are involved.”

Davidson has done three previous receiverships involving PC companies — one in Scotland, and in New Zealand, Eclipse and Osborne.

He confirms there is no legal protection for people who have paid deposits to companies which go broke. “Most people have never been caught in a situation like this and they can’t understand it. They’re very angry.”

It will be some weeks before the exact financial situation of Best Buy is known. Davidson says the claims are still rolling in and there is some stock counting still to be done.

He confirms there is a “sizeable hole” in the company which is likely to amount to several hundreds of thousands of dollars.

Commenting on Mark Mahony’s refusal to appoint a liquidator, he says there is no obligation on Mahony to do so. But he feels it should be done to protect the interests of those who have paid deposits.

“I’ve been appointed by the debenture holder [the National Bank]. Once I’ve paid the bank out I’m duty bound to retire.”

He says the deposits range from a few hundred dollars to several thousands of dollars.

He also confirms that there is holiday pay owing to some employees. “Two or three have been in touch. The company records indicate there is probably more owing.” Holiday pay is a preferential claim.

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