Is it illegal to sell inventory that was written off as damaged?

Question

I know of a company that got quite a bit of insurance money after a hurricane in florida because the building was damaged and their inventory was damaged. I have overheard them say that they have written off all of their inventory because it was a total loss but I know for a fact that they still have quite a bit of inventory here and are selling it. I work for this company and enter all orders that come through the door.I thought that was illegal to do cause they got insurance money for the damaged stuff and also wrote it off.

Answer 1

Bamma not a legal expert. Bamma just a man who sees things. Bamma say one of two things. Bamma say insurance company owns stuff now. Bamma also say if you sell it it's income. Bamma say claim it on taxes. Bamma say or you be deported like Bamma was. Bamma just sneak back cross border though. Bamma say so.

Answer 2

Not a leagal expert but here is my thought.

Insurance would in most cases sent someone out to investigate before cutting the check. Once they have cut the check that says that they agree that the stuff was dammaged and can't be sold as a new item.

If the company is selling the stuff as new then this is wrong.

If the company is selling the stuff at a discount as hurricane dammaged then that is probably fine.

They would have to dispose of it some way and the insurance probably did not cover 100% of the value of the inventory even through they may have written 100% of it off. So if the company can get back some of what was not covered by selling whatever may not have been dammaged at a discount, then it would probably be fine.

Even if they are selling some of it as new, if the packaging is ok and the product is ok then the insurance company will not care.

It would cost the insurance company too much money to come up with an exact figure of the damages. So if the investigator for the insurance company sees enough damage then they probably just wrote off all of it, even through some of it was fine.

I don't think there is a problem unless there is a huge percentage of the inventory that they are claiming but was not really dammaged. And then it would be a fraud case for the insurance company.

Answer 3

Damaged Materials can still be sold IF SOMEONE IS WILLING TO BUY.

There is no way they can sell things for what their original value is... they need to get rid of things one way or another and their options would be to pay someone to take it away or ask if anyone actually wants the damaged goods.

Have you ever been to the clearence section of a store? Some of those are recalled, some are damaged, some are returned and some are opened. Some are discontainued. It is up to you to decide if you want to buy it or not. Well in this case these goods are lower then clearence in price likely,.. even trash that is being thrown out people will pay for or bid on.

So yes,.. it happens all the time,.. It is Legal. The people that buy it save money and the people getting rid of it do not have to pay so much into removal. This makes both those happy. At the same time it is likely not being sold to the mainstream... it's takeing to long to explain.

Yes, if the people buying know what they are getting... it's legal.

Answer 4

It depends on the insurance settlement and local laws and the situation.

If you get an insurance settlement for goods, you MIGHT be able to keep the goods if you "buy back" the goods as "salvage".

If they intentionally claimed goods that weren't damaged, then that would be FRAUD.

If they are selling goods that are sub-par, or dangerous, then that would be subject to consumer protection laws or liability actions.

Answer 5

I would think so, but people do it all the time. How would the insurance company know? Unless someone told them...

Answer 6

sounds fishy, they should have donated it. would not want to do business with them