Xiamen Zhongshan Laiya Department Store's 41 suppliers have formed an alliance to launch a lawsuit against the bankrupt department store and the case has been accepted by the People's Court of Siming District, Xiamen.
The plaintiffs said in the petition that they had signed contracts with the Laiya Department Store to open specialty counters in the store. Since the second half of 2008, the department store has delayed the payment of the outstanding debts to them and the total value of the debts has reached at least CNY30 million. These suppliers are mainly from such cities as Shanghai, Guangzhou, Shenzhen, and Fuzhou.
The suppliers said that for a long time, Laiya Department Store Zhongshan branch had a good performance. However, its major shareholder Xiamen Jintongcheng Industry Development Company recently issued a consumer card, which tied-up a large amount of money and further caused cash flow problems in the store. Laiya Department Store Zhongshan branch was finally closed by the local judicial department. Therefore, the suppliers asked the company to assume joint liability for the debts along with Xiamen New Times Laiya Department Store Company, the operator of the Laiya Department Store Zhongshan branch.