ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, January 4, 1997 TAG: 9701060023
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
Former customers of Roanoke-based Holdren's Inc. have not received any repayment for extended service contracts they purchased from the now-defunct company, and the money still may be a long time coming.
Marion Horsley, spokeswoman for the Virginia Department of Agriculture and Consumer Services in Richmond, said the state has received about 1,000 complaints about the contracts since late summer when many found the contracts worthless.
But the appliance chain's former owners, who in May sold the company's assets to a North Carolina dealer, have told the state that as many as 36,000 people may hold the service agreements, Horsley said. Some likely have expired by now.
Crenshaw TV & Appliance Co. of Raleigh bought Holdren's assets, worth $2.3 million, but not the company's $3.1 million in liabilities. Extended service agreements are considered liabilities and were not part of the purchase. Because of that, they have not been honored by Crenshaw, with a few exceptions. Customers have been left holding worthless contracts for which they may have paid hundreds of dollars to guarantee payment for appliance repairs.
An attempt at mediation between Crenshaw and the former owners of Holdren's has stalled, Horsley said. But Crenshaw vice president Steve Vaughn on Friday said his company is preparing to send letters to all Holdren's service contract customers. According to a preliminary copy of the letter, Crenshaw will offer these customers discounts on purchases, repairs and new service contracts.
Just how much money each Holdren's customer could receive through the state consumer office is unclear. Holdren's former owners were required to post a $100,000 letter of credit with the state before the company could offer extended-service contracts.
That money could be used to pay off at least a portion of the now-worthless contracts, Horsley said. But it's unlikely that every customer will be repaid in full.
The Division of Consumer Protection asks any Holdren's customer who bought an extended-service contract to file a complaint form so processing may begin.
To request a form, call (800) 552-9963. The state plans to send an update letter to consumers who already have filed complaints, Horsley said.
LENGTH: Short : 49 linesby CNB