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| Posted: 18 Sep 2008 13:50 | |
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We have accumulated many inactive molds over time. We have tried to contact the owner’s of the tools to come and pick them up, or give us permission to scrap. For various reasons, in many cases we are unable to contact the owner.
How can we legally dispose of, what appears to us as obsolete molds, with out opening us up to legal issues?
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| Posted: 18 Sep 2008 18:24 | |
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We have tried several methods to contact the customer; Calls, letters, fax , e-mail. If all of this fails we try sending registered letters. Once contact is made we notify the customer that molds not run during the last 12 months will be charged a storage charge. This charge is by the month, typically 10-20.00 per month per tool. The usual reply is to scrap the tool or send it to them.
I still have molds for old customers that I have not been able to locate. I would also like to hear from other who may have a solution to this.
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| Posted: 19 Sep 2008 23:35 | |
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Check with your attorney regarding this issue. Our state (Illinois) has a law that allows us to scrap inactive molds under the following conditions:
a. The mold has been inactive for a minimum of 3 years;
b. A letter has been sent to the company CEO at the last known address of the company (we make sure that it's sent via certified mail);
c. No response has been received after 90 days.
For active customers, we typically try to work out a mold scrap arrangement through the buyers. We only send the letter to the CEO if we can't get anywhere with the buyers, or if it's an inactive customer.
Mike Walter
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| Posted: 26 Sep 2008 16:56 | |
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Metro,
Do you charge active customers that have old tooling at your facility the storage charge? If so, how do they take this?
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| Posted: 29 Sep 2008 20:30 | |
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We review each case before we decide to cherge storage. If we have on going business with a customer we would only charge storage if the number of tools and the length of time they had been inactive was very long.
In the few cases where an active customer had several inactive molds the customer instructed us to scrap the tools. They seemed to understand our issue.
If you don't make this an issue your customer never will.
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| Posted: 01 Oct 2008 19:23 | |
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In Ohio, you can follow this action plan.
1. If you own the mold, you can scrap it, sell it, or dispose of it (assuming your contract/PO with the customer does not restrict such action).
2. If the customer owns the molds, but you are still owed money by the customer, then you can sell the mold and apply the sale proceeds to the debt the customer owes you. Alternatively, you can sell as scrap and apply any money you receive to the debt. In such a case, send a letter to the last known address you have for the customer (usually the PO adress), telling the customer you are going to scrap or sell the mold and apply the money you receive to the debt the customer owes. Keep a copy of the letter in your file (even if returned because the customer is now out of business).
3. If the customer owns the mold, but does not owe you any money, then just write a letter (sending to last known address) stating: "We have in our possession several molds owned by you. Those molds [identify the molds by number or part name] have been inactive for some time. If we do not hear from you within 30 days, we will make arrangements to dispose of the molds and invoice you for the costs associated with such disposal." By saying that, you provide ample notice for them to act, and you leave open to either scrap the molds or sell them. Then, go ahead and get rid of the molds as you deem most economical to you. If you sell them, deduct from the sale proceeds a reasonable fee for past storage, and send the excess (if any) to the customer. But, if the customer no longer exists, just keep the sale proceeds.
I'd be happy to discuss in greater detail with you, if you like.
Alan Rothenbuecher
Schottenstein Zox & Dunn
(216) 394-5075
Alan Rothenbuecher
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| Posted: 02 Oct 2008 19:59 | |
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Thanks for all your input. All the information has been very helpful.
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| Posted: 17 Sep 2009 22:43 | |
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I have the same question posed by Ohio Precision Molding. Can anybody tell me if the laws in Indiana are similar to that of Ohio? We have some old tooling we'd like to dispose of, but we are not getting any response from the company that "owns" the tools.
James Doster
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| Posted: 18 Sep 2009 16:10 | |
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A few thoughts:
1. Does the purchase order or your agreement state about how to handle inactive tools? I assume your agreement is silent since you are asking the question, but wanted to make sure you checked the agreement/PO.
2. Are you owed anything by the customer? If so, you need to hold on to the mold to effect your molder's lien. But, you can go through steps to sell the mold.
3. If owed nothing, and the mold is just taking up space, then do the following:
A. Send a certified mail letter to the last known address (or fax a letter) stating you are going to sell or scrap the mold if the customer does not respond back within 45 days with instructions to ship it elsewhere.
B. If no response to the letter, or the company is out of business, then publish a notice in the paper of general circulation in the city of the customer that states the following:
The (name of processor) hereby asserts title to the following property: (general description of property). If you claim ownership or other legal interest in this property, you must contact (name of procesor) in writing, establish ownership of the property, and make arrangements to collect the property. If you fail to do so within ninety days, the property will be considered abandoned and will become property of (the processor).”
C. After you get no response, do with the mold
what you wish.
One note: Proceeding with the preceding route is best done after the mold has been inactive for at least one year because most state laws say abondonment occurs after one year (although Mike notes that Michigan requires 3 years). Also, make sure to keep a paper trail of your efforts. If you follow those steps, you are hard pressed to be liable for disposal of the inactive molds.
-Alan Rothenbuecher
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| Posted: 22 Jun 2010 16:43 | |
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Do these laws differ in New Jersey?
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| Posted: 22 Jun 2010 23:04 | |
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New Jersey has a few nuances. First, if a customer does not claim possession of mold within 3 years following the last prior use, send a letter via registered mail (return receipt requested) to the last known address, telling the customer all rights to the mold are being transferred to you. If the customer does not seek to take possession of the mold within 120 after the notice you send out, all title to the mold transfers to you and you can sell or destroy the mold.
If customer owes you money, and the balance remains unpaid 60 days after payment due, the molder may sell the molds at public auction in county where molds are held. Before you can sell, must notify customer (or owner if different from customer) by certified mail of: (i) intent to sell mold 30 days after notice mailed; (ii) description of mold; (iii) time and place for sale; and (iv) itemized statement of amount due (New Jersey permits you to include cost of materials related to the unpaid work).
If you sell the molds, you get paid first for the balance due and expenses for sale. If there is any excess, any prior lien holders get paid, with the remaining amount (if any) going to the customer.
Let me know if you have any more questions.
Alan Rothenbuecher
SZD
216-394-5075
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