Springfield, N.J. - GE
Capital has cut its credit to Sixth Avenue Electronics and has gone to federal
court to collect $9.6 million in past-due payments.
The complaint, filed in
the U.S. District Court in Wilmington, Del., charges that Sixth Avenue
defaulted on a $6.4 million payment to GE Capital's Commercial Distribution
Finance arm (CDF), which has provided the chain with inventory financing since
CDF is seeking possession
of inventory and collateral and has suspended the retailer's credit facility,
court documents show.
Sixth Avenue could not
comment on the litigation.
The New Jersey-based A/V chain began a
multi-state build-out in 2009 that carried it into Philadelphia and Delaware, giving
it 19 stores at its peak.
But since last month the
privately held company has closed eight locations -- including one today in
West Paterson, N.J. -- and plans to shut a ninth and final store, in
Livingston, N.J., tomorrow.
Operations VP Tom Galanis
said many of the closures reflect the chain's decision to exit the major
appliance business, rendering larger locations, some with as much as 35,000
square feet, redundant.
Instead, Sixth Avenue
plans to relocate several stores, including the one in West Paterson, to
smaller, 10,000-square-foot showrooms, Galanis said.