Court Order sneaker consignors fear for their stock as the resale shop goes into liquidation

More than 100 people who left limited-edition sneakers and clothing with the resale business Court Order fear they will lose stock and money, now that the company is in voluntary liquidation. Some say they are owed between R50,000 and R100,000 each, according to a Sowetan report published on Sunday.

Founder Ahmed Seedat ran Court Order as a consignment business: collectors handed over pairs, Court Order displayed and sold them, and it kept a commission. It had four shops, in Rosebank, at Gateway in Durban, in the Cape Town CBD and at the V&A Waterfront. All four have closed.

Why it closed

Seedat told The Witness on 20 October that the business had run for close to a decade before it could no longer pay its way. "As the market slowed, sales and margins came under pressure while our operating costs remained substantial," he said. He said the company tried raising commissions, taking on debt, finding an investor and selling the business, and none of it worked.

At that point no liquidator had been appointed. Grant & Swanepoel Attorneys are the liquidation attorneys on record.

What consignors say

Dean Promnick, who started consigning with Court Order in March 2021, told Sowetan he is owed about R110,000 in cash and still had stock worth R250,000 to R350,000 with the business. He had pulled 64 of his 110 items out before the liquidation, leaving 46 behind. He said payments first fell about three months behind earlier this year, then six to seven months behind, while his stock kept selling.

Another consignor, who asked Sowetan not to use his real name, said he is owed R129,000, that some of his items are missing, and that emails to the company went unanswered. He said Seedat responded only once consignors found out about the liquidation.

The director's position

Seedat confirmed the liquidation and apologised for how little the company had told the people whose goods it held. "I recognise the distress, anger and uncertainty this has caused," he said.

He said the company's bank accounts are frozen, so it can't make any payments. Unsold consignment stock still belongs to the people who brought it in, and it isn't part of the assets available to creditors. He told The Witness that stock will be returned to its owners under procedures set by the liquidator. Money owed for pairs that have already sold will be dealt with through the liquidation itself, which leaves those consignors waiting with other creditors.

Once a liquidator is appointed, the business could keep trading, close for good or be sold out of liquidation. For now, consignors with pairs still on Court Order's shelves have to wait for the liquidator before they can get them back.