Computer Disposals ceases trading

Reseller Computer Disposals has ceased trading due to costs associated with an ongoing legal battle with direct seller Dell Computer.
 
Last week, Computer Disposals MD Tom O'Donnell posted a statement on the reseller's website, saying it had stopped selling computer products while it resolved its efforts to collect money owed to it by Dell.
 
The reseller was originally established to handle Dell Computer's cancelled new returned products. The agreement stated that the reseller would receive a buy price of a minimum '15 percent off cost of build or selling price.'
 
However, the agreement went sour when Dell opened its own online factory outlet in September 2002 and, according to the reseller, had failed to honour the discounts.
 
It also claimed that Dell had overcharged for warranties. 'The warranty for all products would be restricted to a 12-month warranty apart from servers, which would be three years. We were specifically excluded from offering our customers a greater warranty than 12 months,' O'Donnell said in a statement.
 
'We had an ongoing issue with Dell that they would invoice us repeatedly for three year warranty when we were only allowed to sell 12 months and unknown to us at the time, they [Dell] were not giving us the discounts as agreed by myself [and] Kevin McCarthy, the then financial controller of Dell,' he said.
 
Early last year, the reseller lodged documents in the Supreme Court over both issues, which O'Donnell claimed had cost the company around $500,000. Dell is also counter-suing Computer Disposals for withholding payments on stock the vendor had supplied.
 
Rather than incur more debt, O'Donnell said the company stopped trading as it attempted to recover the money. 'Accountants are going through us with a fine-toothed comb,' O'Donnell said.
 
'It has been catastrophic for me personally. I've never sued anyone before in my life –- [but] you just can't stand by and cop that,' O'Donnell told CRN. “I'm against litigation, but what do you do?' he said.
 
'Financially I'm facing ruin – if I lose this, I'm facing bankruptcy,” he said.
 
'I went into a business venture with a company that has a stated goal of destroying the reseller's business -– more fool me,' O'Donnell said.
 
The case is expected to go to trial in May.

Dell was not available for comment at press time.