Dell gags Computer Disposals in court settlement

Dell Computer has settled out of court with former partner Computer Disposals, allegedly forcing the latter to agree not to comment on any details of the case, past or present, as part of the deal with the cash-strapped reseller.
 
Computer Disposals started proceedings against Dell in the NSW Supreme Court mid-2003, alleging that the vendor had failed to honour three-year warranties on its products.
 
The reseller had agreed to sell cancelled orders of Dell hardware which it believed included three-year warranties. It was alleged at the time that Dell had instead given the products a one-year warranty but charged Computer Disposals for the full three years. Overcharged invoices were believed to total at least $334,337.
 
Sydney-based Computer Disposals ceased trading in March as a result of the protracted battle with Dell.
 
Tom O'Donnell, MD at Computer Disposals, said he had been forbidden to disclose any details of the settlement, which was reached just before the parties were due to appear in court again 3 May.
 
O'Donnell said the settlement had involved the signing of a confidentiality agreement. As a result, he could not confirm whether it had involved a financial payment by Dell to Computer Disposals, he said.
 
'I can't comment on what happened between us. I'd love to ... but I can't,' O'Donnell said.
 
Computer Disposals' initial lawsuit had been for more than $334,337, he hinted. It has been reported that the initial suit may have been for $500,000, which included 15 percent discounts on hardware as well as the amount for the disputed invoices.
 
Dell had counter sued, alleging partly that Computer Disposals did not have the money to pursue the court case to its conclusion, but withdrew that challenge in September. Dell also alleged that Computer Disposals had withheld payments for some stock.
 
Computer Disposals stopped selling Dell product in October and had since tried to rebuild its business using other brands. O'Donnell told CRN last month that the cost of the legal wrangle had forced the reseller to cease trading, at least until the issue was resolved.
 
However, O'Donnell said today that no decision had yet been made on Computer Disposals' long-term future following the settlement.
 
The company was not yet in a position to trade again. 'We would be insolvent if we continued to trade,' he said.
 
Meanwhile, O'Donnell has another business - Plasma Central - focusing on plasma screen sales. However, that business was too small to provide a solid base on which to continue, he said.
 
Dell - a direct-selling aficionado which occasionally assigns resellers to dispose of cancelled orders, second-hand, surplus and discontinued stock - was contacted for comment but had not returned CRN's calls at the time of going to press.