Apple Hit With $57M Lawsuit Over Collapse of Aussie Retailer

Australian retail chain Buzzle went into receivership in March 2001, owing $20 million of its $30 million debt to its primary supplier, Apple, but now its liquidator, Andrew Wily of Armstrong Wily, is suing the computer maker. Mr. Wily told The Australian that he launched the AUS$57 million lawsuit because Apple was effectively involved in a "shadow directorship" of Buzzle.

"When Buzzle started, [a $15 million debt to Apple] was transferred on to its books and made life very difficult," Mr Wily told reporter Michael West. "Then the company incurred another $22 million worth of debt to Apple from purchases of stock.

"It will be alleged in these proceedings that Apple was aware that the company (Buzzle) was insolvent and should not have allowed the debts to be incurred. As such there is a legal argument that Apple may be held liable for debts incurred by Buzzle. Further, we are claiming that the charge over Buzzle is void."

Apple declined to comment on the matter, but Mr. West writes that the company is "expected to defend vigorously" the charges.

Six Australian Apple resellers formed Buzzle in September 2000, amounting to 80% of Appleis business in Australia, but the dot-com crash put the computer industry in a slump. Within six months, Apple had called in KPMG as the receiver of the debt-laden company and went after Buzzleis directors. Two of those directors sued Apple but lost.