Like a spirit from beyond the grave, bankrupt Sharper Image Corp. is back and searching for its former gift card holders. But this is a benevolent ghost: Its mission is to start the process of finding and reimbursing them. Sharper Image, which now goes by the name of TSIC Inc., wants to spend $60,000 in marketing costs to locate its gift card holders, and will ask a Delaware bankruptcy court to give its blessing, according to a Wall Street Journal report.
In a hearing set for May 17, TSIC is also expected to ask the judge to approve a proposal to reimburse the holders for the value of their Sharper Image gift cards, up to $2,245 for each card, the article notes. Of course, as is the case with most bankruptcies, senior debt holders and creditors are at the head of the line among those seeking repayment from TSIC. But whatever funds remain after they get their share could be disbursed among gift card holders.
The former electronics and gadgets retailer, which filed for bankruptcy in 2008, is now on the hook to recognize the gift card holders as bankruptcy creditors, after one of them filed a lawsuit in that same year asking all Sharper Image gift card holders be given that status, the Wall Street Journal reports. At the time of Sharper Image's bankruptcy filing, the value of unredeemed gift cards was estimated to be around $20 million. The plaintiff won that suit, and all Sharper Image gift card holders will have the chance to collect.
Those gift card holders were particularly riled up because a month after the company filed for bankruptcy, it said it would accept its gift cards, providing customers spent double the value of the card in order to redeem it. Then, several months later, it stopped honoring the cards altogether -- hence the lawsuit.
Although Sharper Image was sold to a consortium of investors in 2008 for $49 million, its brand continues to be licensed.
For anyone looking to collect on an old Sharper Image gift card, the best shot is to submit a photocopy of the card to the bankruptcy court. The second-choice option is to submit an "affirmation" letter that they had one if they can't locate the actual plastic, the Journal article says.
What are Penny Stocks
The lucrative and dangerous world of penny stocks.View Course »