January 18, 2024
Signify Continues to Squeeze Defiant Deco Lighting
Bankrupt Deco Lighting faces renewed pressure from Signify over unpaid monies
In the latest chapter of Deco Lighting's prolonged bankruptcy saga, Signify, the world's largest lighting company, has intensified its efforts to secure payments owed by Deco Lighting. According to a recent filing in the California bankruptcy court, Signify is petitioning for $59,355, a fraction of the original amount owed, as part of its ongoing demand for payment from the defunct lighting firm.
This move by Signify is the latest in a series of legal actions against Deco Lighting. It began in 2017 when Signify filed a patent infringement lawsuit, leading to a confidential settlement. Bankruptcy court documents reveal that Deco Lighting agreed to pay $450,000 but after paying more than half of the amount off, subsequently ceased monthly payments. Deco Lighting's refusal to fulfill this obligation has been a cornerstone of the ongoing legal battle in Deco Lighting’s bankruptcy proceeding, with Signify persistently pushing for what it is owed.
Adding to the complexity of Signify's motion, ABS Capitol, a firm managed by two of Deco Lighting's cofounders, Babak (Bob) Sinai and Siamak (Sam) Sinai, acquired all assets of Deco Lighting in a court-approved sale in December. In Deco Lighting's Chapter 7 bankruptcy case, where assets are liquidated to settle debts, not all creditors are equally prioritized. Attorney Gary Weis, representing Signify, aims to reclassify the $59,355 as an administrative expense under 11 U.S.C. § 503, a move that, if successful, would prioritize this claim in the payment hierarchy.
Signify's strategy hinges on the argument that the post-petition goods and services provided to Deco Lighting were essential for its operational continuity, thus directly benefiting the bankruptcy estate. This argument forms the basis of their claim for these expenses as high-priority administrative costs. The long list of lighting vendors and lighting agents who are owed payments by Deco Lighting are not expected to receive any monies from the estate.
Deco Lighting's response to Signify's demands in the past has been marked by defiance. According to bankruptcy court documents, Deco Lighting accused Signify of acting like "bullies." This accusation came amidst the ongoing demands from Signify for the settlement amount, highlighting the contentious nature that Deco Lighting ownership has exhibited towards Signify.
While Signify is unlikely to ever recover the full six-figure sum owed by Deco Lighting, its current strategy may yield a partial recovery of funds. Signify’s motion is scheduled for a hearing on February 28, 2024, at 10:00 am in Courtroom 1539 of the Edward R. Roybal Building and Courthouse in Los Angeles.
