Advice WILDMAN gone wrong....

[BigT]

Begrudging those whose financial situation is better than yours is what socialists do.

[Flintstone]

Is'nt there a rule where the dealer cannot dealerstock(SAP350) a firearm unless it is paid in full at the importer?
This would make sense to protect both the dealer and the wholesaler/importer.Not implementing this rule will in my books inevitably lead to the scenario WM and unfortunate f/a buyers currently finds themselves in.

[Craig]

Is'nt there a rule where the dealer cannot dealerstock(SAP350) a firearm unless it is paid in full at the importer?
This would make sense to protect both the dealer and the wholesaler/importer.Not implementing this rule will in my books inevitably lead to the scenario WM and unfortunate f/a buyers currently finds themselves in.

How does consignment stock work then?

[Andrew Leigh]

OK so back to the OP.

Not every business that goes bad has been a deliberate fraudulent transaction. Often the smaller business simply do not have resources to employ good financial people who can correctly establish the liquidity of the business though producing financial ratio's that empirically tell you about your short term liquidity. If you don't have these the business can easily go from hero to zero with a month or so, especially if the business is already cash stressed.

The second dynamic is that business owners simply refuse to accept defeat and will not take advice, always believing in their own abilities to save the business as they don't appreciate the depth of the problem. Business can have fantastic order books, show profit but have no cash. Many smaller business people simply do not understand the difference between profit and cash. Lack of cash leads to liquidations.

So what will happen now? Unless the business has been placed into voluntary liquidation there is a chance that they have approached a business rescue practitioner with a view to saving the business while under administration. The business rescue role is to is to try save as many jobs as possible while securing funds through extended credit lines from existing creditors to fund the business back to health while compromising creditors as little as possible. i.e. rather let a creditor extend additional funding and take a bath for 30% than 100% of their debt due.

Having said which many smaller businsses simply do not have the fiscal controls over their business and when they approach a rescue practitioner the business is already well past saving, this leave practitioners with bad names but you can only save what is savable.

Your money, if the business is in liquidation, then the liquidators will liquidate all the assets and will pay the secured creditors first, the banks and other lenders, the people who have special and first session session on the funds, following that will be the concurrent creditors of which you are one. The formula is simple Total cash raised from the sales of assets - secured creditors = dividend payable to concurrent creditors. So if there is R 10 000 left and R 100 000 worth of concurrent creditors then you will get 10c in the rand. So assuming a R 10 000 deposit you will get R 1 000 back. The process could take up to a year or even longer. You will need to register a claim but be aware of the risk of contribution.

If in business rescue there will be a date that the business legally enters business rescue. All claims prior to that are also subject to a dividend payable reached after a compromise with the creditors is reached but the business rescue practitioner. If no compromise can be reached the business will almost certainly be placed in liquidation.

Bottom line, both are legal processes and are afforded legal protection under these umbrella's. So don't run to your lawyer until you establish what is going for what. If they simply have walked away then you have a civil case which will in all likelihood cost you way in excess of you deposit. There are time to live and fight another day. Way up your options carefully.

Allow commercial considerations to outweigh emotional ones.

[Andrew Leigh]

So consignment stock is an issue of trust between the supplier and the dealer. Many of the goods you buy in Pick and Pay are in reality consignment stock. KOO puts beans on the shelf for nothing, the difference between the open stock and the close stock is the sales which are invoiced to P&P. The beans on the shelf remain the property on KOO.

Now in the context of this this discussion. The non invoiced beans belong to KOO and may be removed from the premises with the consent of the liquidator / rescue practitioner. The beans invoiced before the entering into liquidation or business rescue will be considered pre-commencement debt and will be subject to the dividend that get calculated. There are exclusions to this but none of which I believe remotely apply to the OP's matter.

[Zuku]

Every wholesaler and importer I know reserves ownership until goods are paid for in full. If the wholesaler is owed on that gun then ownership cannot pass as the dealer is not entitled to sell it, as he is not the owner merely the possessor.

It then follows that the customer cannot be the owner. His claim sounds in money against the dealer. Even if he has a licence.

In fact, if a dealer purports to sell a gun which he is not the owner of he commits fraud.

Hi SSP

Please clarify this post to people with limited law understandings.

If the wholesaler reserves ownership until goods are paid for in full. Then Dealer cannot sell and if he sells he is is selling fraudulently? Isn't there a understanding that the dealer may sell while in his possession. Is the salesman or dealership committing fraud?

To take the sample of Koo jam at Pick and Pay. Wholesaler give P&P stock and P&P havent paid Koo yet. Cust pay P&P, take jam and leaves shop. P&P is now suppose to hand money over to Koo. Was this sale then also fraudulently.
I know the problem with a FA is the license and to whom the license is registered currently.

How must a FA buyer then ensure he is buying "legally" from dealer. If FA still shows on wholesaler name must he wait until FA shows on dealers name before any money is transferred to dealer.

Once it is on dealers stock and not wholesaler, If cust paid in full for FA. License app still awaiting approval is he then the "legal" owner even if dealer goes under.

I'm myself is now in process of purchasing so I place a hold on sale till I get better clarification.


.

[SSP]

Hi SSP

Please clarify this post to people with limited law understandings.

If the wholesaler reserves ownership until goods are paid for in full. Then Dealer cannot sell and if he sells he is is selling fraudulently? Isn't there a understanding that the dealer may sell while in his possession. Is the salesman or dealership committing fraud?

The dealer cannot sell what he does not own, absent an agreement with the wholesaler. The dealer makes the misrepresentation to the customer that he is entitled to pass ownership to the customer, but he cannot because he is not the owner.

To take the sample of Koo jam at Pick and Pay. Wholesaler give P&P stock and P&P havent paid Koo yet. Cust pay P&P, take jam and leaves shop. P&P is now suppose to hand money over to Koo. Was this sale then also fraudulently.

That is a different thing entirely. That is consignment stock and there is an agreement between the wholesaler and the retailer which entitles the retailer to sell stock that they have not paid for yet.

I know the problem with a FA is the license and to whom the license is registered currently.

That is not, in fact, the problem. Holding a licence or the reflection of a firearm in a dealer's stock does not make them the legal owner.

Once it is on dealers stock and not wholesaler, If cust paid in full for FA. License app still awaiting approval is he then the "legal" owner even if dealer goes under.

Nope. See above. The dealer is not capable of passing ownership and, accordingly, the licence holder's title is defective. The wholesaler, if he is owed money in respect of that particular gun, can obtain an order for its return. The customer's "good faith" is irrelevant.

I know that this practice is common in the gun trade and always has been. It is never a problem right up until it is.

The answer to the problem is not to deal with skaty dealers.

Deal with guys with a solid reputation and a good trading history.

Don't shop on price alone.

[BigT]

The answer to the problem is not to deal with skaty dealers.

Deal with guys with a solid reputation and a good trading history.

Don't shop on price alone.

This. So much of this.

[Zuku]

The wholesaler, if he is owed money in respect of that particular gun, can obtain an order for its return.

Thanks. So the solution for the purchaser is to confirm that the firearm is paid up by the dealer to the wholesaler. I just wonder how difficult or easy this exercise is and how does one do it.

[SSP]

Thanks. So the solution for the purchaser is to confirm that the firearm is paid up by the dealer to the wholesaler. I just wonder how difficult or easy this exercise is and how does one do it.

That is only one solution.

The others are set out in my post which you have quoted.