Top Chinese TV maker sues Apex for $484m

[VeriSexy]

China?s top TV maker has sued U.S. consumer electronics firm Apex Digital Inc. for $484 million after Apex wrote a string of bounced cheques that led to the house arrest of its China-born chairman.


The lawsuit, filed by Sichuan Changhong Electric Appliance Co. Ltd. in mid-December, details the dispute that caused Changhong to disclose a week ago that it was setting aside $310 million for unpaid bills from Apex.

The suit, filed in Los Angeles Superior Court, alleges that Apex began issuing a trail of bad cheques amounting to millions of dollars as early as 2003. Changhong is demanding immediate payment and is threatening to foreclose on Apex?s U.S. properties and assets.

After racking up hundreds of millions of dollars in debt, Apex agreed to a repayment plan in October only to miss its first two repayments, sparking a new tussle that ended with the arrest of Apex co-founder David Ji in China for cheque fraud, according to the complaint.

A spokeswoman for Apex, whose branded televisions and DVD players sell through retail giants including Wal-Mart and Circuit City, declined to comment on the suit and said an official response was being prepared. A Changhong spokesman also had no comment.

Since its announcement on Dec. 28, Changhong shares have lost a quarter of their value.

In the lawsuit, Changhong says its relationship with Apex, worth hundreds of millions of dollars, began when the two companies started doing business in 2000.

?Apex paid for its initial orders but soon fell behind in its payment obligations,? the complaint stated.

CHEQUES REJECTED

In 2003, Apex wrote a series of 37 cheques to Changhong worth a combined $70 million, it said.

?Despite the Bank of China?s attempts to present these cheques to Apex and its bank for payment, each of the cheques was rejected, and efforts to cash them were finally abandoned in July 2004,? the complaint said.

It added that Apex?s outstanding payments due to Changhong as of Oct. 29 last year totalled $472 million.

The companies agreed on a work-out plan in late October, including rights to Apex?s 200,000-square-foot warehouse in Compton, a gang-ridden city near the port of Los Angeles, and other assets such as trademarks and copyrights, in the event of default.

Apex missed its first two payments totalling $150 million, prompting Changhong to take its court action. Ji was placed under house arrest ?on criminal charges stemming from Apex?s issuance of some $70 million in bad cheques to Changhong,? according to the suit. A U.S. embassy spokesman in China confirmed the arrest.

Apex told Reuters on Monday that Ji, a naturalised U.S. citizen born in China, was returning to the United States this week to attend a trade show. The U.S. embassy spokesman could not confirm his release.

In a possible new twist in the case, the Communist Party boss of Mianyang County, where Changhong is based in western Sichuan province, was removed from his post on Dec. 31, after only 10 months on the job, according to a county spokesman.

The spokesman confirmed that Huang Xuejiu was no longer party secretary, but said his departure was part of a ?normal shift in work duties?. He declined to say where Huang had been posted to.

Chinese DVD maker Genius Co. Ltd. has also said it is owed US$4.3 million by Apex.

http://news.ft.com/cms/s/4cd205f6-5e...00e2511c8.html

[SmokeyTheBear]

Damn they even owe me like $50 for a fucked up camera too.

[xclusive]

that sucks apex makes some decent low cost players

[VeriSexy]

Originally Posted by xclusive

that sucks apex makes some decent low cost players

They don't make anything, they use Chinese OEMs and juse stamp the Apex label onto their products. Here's their site

http://www.apexdigitalinc.com/

[emthree]

The companies agreed on a work-out plan in late October, including rights to Apex?s 200,000-square-foot warehouse in Compton, a gang-ridden city near the port of Los Angeles, and other assets such as trademarks and copyrights, in the event of default.

Interesting.

[TheMob]

that's ridiculous, don't you think?