Author Topic: Warranties not honored by successor businesses?  (Read 182 times)

The Gorn

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Warranties not honored by successor businesses?
« on: October 19, 2017, 05:59:17 PM »
I identified two bad memory modules from my computer using MemTest86. As the gang here knows, I swapped modules until I isolated the bad apples, and I also have run an overnight test with the remaining modules and they seem solid for now.

The original kit of memory was OCZ brand, purchased in late 2009 from TigerDirect. 6 modules of 2GB each, DDR3 memory. This product:

https://www.amazon.com/OCZ-OCZ3G1333LV12GS-PC3-10666-Triple-Channel/dp/B001O0DR2I/ref=cm_cr_arp_d_product_top?ie=UTF8

It was pricey at the time ($276). The box which I kept states clearly that there is a lifetime warranty on these items.

I contacted "OCZ Support" through their Facebook page and explained this, and they told me this:

Quote
Toshiba does not provide warranty service for the former OCZ Technology group memory modules. OCZ Technology Group stopped producing memory in 2010 and filed for bankruptcy in September of 2013.

Toshiba is unable to provide any warranty support for the following legacy and end of life “OCZ Technology” products that were discontinued. Toshiba is also unable to provide any warranty support for all discontinued non-SSD category products including DRAM memory, USB drives, Power Supplies, DIY notebooks and peripherals.

I’m sorry for not being able to help you with this case.
Please let me know if you have any other questions

I think that's quite fucked. But it raises an interesting question. Don't businesses that are acquired wind up with ALL of the assets AND, AND, AND debts of the acquired business?

Well, I Googled and found this. This explains it. Yeah, the warranty is fucked (lost).

https://www.extremetech.com/computing/171784-ocz-files-for-bankruptcy-toshiba-to-acquire-assets-but-warranties-could-be-lost

Now, I'm not out much because tech stuff depreciates like crazy. Still, it's quite unethical IMO even if legal.
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pxsant

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Re: Warranties not honored by successor businesses?
« Reply #1 on: October 19, 2017, 06:13:37 PM »
When a company files for bankruptcy, all bets are off.   Toshiba probably purchased certain OC assets but not the entire corporation.   So their liabilities were likely eliminated during the bankruptcy process.

A good example of getting screwed was when GM filed for bankruptcy a few years ago and got the court to eliminate ALL current common stock.   GM then issued new stock and sold it on the market.  All old stockholders were screwed out of their GM assets.  I know because I held about 500 shares of GM when this happened and I lost it all.

The Gorn

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Re: Warranties not honored by successor businesses?
« Reply #2 on: October 19, 2017, 06:23:29 PM »
Got it. The loophole here was bankruptcy. All debts wiped, and warranties are a liability.
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benali72

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Re: Warranties not honored by successor businesses?
« Reply #3 on: October 19, 2017, 08:11:05 PM »
Yes, this is where the idea of "strategic bankruptcy" comes from.

Corporate leaders invented it a few years ago, as a process whereby owners or investors would purposely take a company through bankruptcy that decades ago never would have been declared bankrupt. 

Their goal is to use the bankruptcy process to potentially invalidate employee agreements, customer warranties, burdensome debt, and other obligations they want to eliminate.

Accurate or not, our President has been accused of this tactic in the four of his bankruptcies he argued were smart business decisions (ref. the Politifact anaylsis at www.politifact.com/truth-o-meter/statements/2016/jun/21/hillary-clinton/yep-donald-trumps-companies-have-declared-bankrupt/)

ilconsiglliere

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Re: Warranties not honored by successor businesses?
« Reply #4 on: October 20, 2017, 03:01:45 AM »
Yes, this is where the idea of "strategic bankruptcy" comes from.

Corporate leaders invented it a few years ago, as a process whereby owners or investors would purposely take a company through bankruptcy that decades ago never would have been declared bankrupt. 

Their goal is to use the bankruptcy process to potentially invalidate employee agreements, customer warranties, burdensome debt, and other obligations they want to eliminate.

Accurate or not, our President has been accused of this tactic in the four of his bankruptcies he argued were smart business decisions (ref. the Politifact anaylsis at www.politifact.com/truth-o-meter/statements/2016/jun/21/hillary-clinton/yep-donald-trumps-companies-have-declared-bankrupt/)

This is what the hedge fund guy that bought Sears did. He bought K-Mart, declared bankruptcy voiding all their everything and than bought Sears via the K Mart leverage. Than he ran Sears into the ground but thats a whole other story.

This is a normal tactic with hedge funds and others. They buy the company up, declare bankruptcy wiping out the debt and stuff and than sell off the parts of the company for massive profit.

Nice racket if you can do it.

The Gorn

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Re: Warranties not honored by successor businesses?
« Reply #5 on: October 20, 2017, 07:58:54 AM »
On the other hand...

The core feature of bankruptcy is the discharge or repudiation of debt. And warranties amount to debt. The concept is to give a fresh start to someone/some entity.

The law applies equally to everyone (in theory, har har), even corporations.

I read a little about the bankruptcy of OCZ, the subject of my thread. They had a big problem with some SSD drives they were selling - many returns of product - which was part of their failure which lead to their bankruptcy.  So providing warranty service was part of their failure. I guess I bought a shitty product. :P

If a corporation like OCZ can't discharge certain obligations like warranties, then they probably won't be acquired by anyone, yet because they're insolvent, they can't service the warranties anyway, so no real value is being lost. So the bankruptcy process seems to allow as much value in a company to be preserved as possible.

I was screwed about 10 years ago when National City Bank went under -  I owned 100 shares - and was acquired by PNC for pennies on the dollar. I wound up with about $300 in the account in PNC shares to replace the National City shares.

But at least I haven't been screwed out of a pension, or major warranty work on a vehicle.

I ordered 2 x 2GB to replace the failed OCZ memory for $27 from Ebay. Gorn's Self Insurance Policy. :P
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