Thirty-two Bangladeshi apparel makers have received US$5.0 million so far in cash out of $41 million work orders from American buyer – Sears – through a settlement reached after a lawsuit, said people involved with the process.
According to the settlement, these 32 factories will be given an additional $1.6 million.
The report ‘Bangladesh Garment Makers Score Victory Against Sears in $40 Million Lawsuit’, published in Forbes on Saturday, said that a US attorney’s Bangladeshi clients have gotten “the bulk” money back in the settlement.
When asked, Iqbal Hossain, managing director of Patriot Group, said after they had filed the case through a US law firm, a settlement was agreed upon between the Bangladeshi suppliers and Transformco, the privately-held company set up by American billionaire Edward Lampert’s ESL Investments hedge fund.
Transformco paid $5.0 million in keeping with the settlement after the release of the shipped goods worth $22.7 million, he said.
However, the suppliers have, in their possession, ready goods worth $11.9 million and raw materials valued at $6.4 million against the $41 million work orders, Mr Hossain pointed out.
It was also settled that both the parties would get 50 per cent each from the amount that would come from the sales of the remaining goods.
“We are scheduled to get $1.6 million but yet to receive the agreed amount,” he told the FE on Sunday.
The 32 factories belong to 13 apparel manufacturing groups, namely Nassa, AKH, Babylon, Prudent, Envoy, ABA, Mohammadi, Palmal, Windy, Meghna, Sotex, Pearl Global and Amtranet.
The Forbes report said the ‘crumbling retailer’ left its manufacturers with stacks of its clothing and unpaid bills last spring and has stiffed them multiple times before as it muddled through ugly bankruptcy proceedings.
The report quoted attorney Joseph E Sarachek as saying that the 21 Bangladeshi factories filed the lawsuit against Sears last June before reaching the settlement with Transformco.
“The suppliers were obviously thrilled that we got them a significant return,” Sarachek was quoted saying.
However, when his attention was drawn to this issue, Mr Hossain claimed that the Forbes’ report was fake.
In her quick response to the FE query, Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said the news story was ‘misleading’.
