Tech giant Apple has finally been cleared of any wrongdoing in relation to the collapse of the Apple reseller group Buzzle, following nearly a decade in legal battles and hearings to determine whether the group acted as a shadow director.
The New South Wales Supreme Court ruled yesterday that Apple, and its finance director James Likidis, were not shadow directors of Buzzle, and that there was no basis in the $57 million claim brought against both parties by Buzzle’s liquidator.
Buzzle was formed in 2000 by a group of six resellers, but collapsed nearly a year later with $30 million in debt and $20 million owed to Apple, the major supplier.
However, liquidator Andrew Wily of Armstrong Wily accused Apple, and Likidis, of assuming “shadow director” roles during the company’s last days. He said Apple executives took control of the Buzzle board, and that when the company went broke, Apple needed the group to continue trading to prevent the six resellers from demerging.
Court battles continued last year, when the case came before Justice Richard White over a matter of weeks.
But yesterday White dismissed the claim against Apple and Likidis, saying they did not act as shadow directors and that they were not responsible for any debts incurred. He also said Buzzle was insolvent from at least November 6, 2008, at which stage it owed Apple $24 million and $1.5 million to other creditors.
In a statement quashing Wily’s accusations, White found that Apple and Likidis did not instruct Buzzle, but took part in negotiations at “arm’s length”. He found that Buzzle failed due, in part, to a flawed accounting system.
”This created insuperable difficulties for the merged business. Buzzle was unable to identify its debtors,” he said in his judgement. “Apple faced substantial losses if Buzzle went into administration or receivership from the loss of sales and damage to Apple’s brand. But motive for Apple to give directions to Buzzle’s board, does not establish that Buzzle’s directors were accustomed to act in accordance with Apple’s wishes.”
“For these reasons I conclude that neither Apple nor Mr Likidis was a director of Buzzle within the meaning… of the definition of ‘director’.”
Meanwhile, Apple is preparing customers for the upcoming release of the iPad with a new update to the company’s flagship iTunes software.
The update to version 9.1 adds a number of new features including support for multimedia jukebox software, improved recognition of “genius mixes” and one major addition – syncing support for the iPad.
The feature will allow iPad users to move over their music, movies, TV shows, books and other media content from their MAC or PC. The new update also allows organisation and syncing for iBooks, the application included on the iPad to help manage eBooks.
However, users will not be able to browse the iBooks Store until the iPad is released this coming Saturday. Australian users, however, will be forced to wait until later next month when the iPad hits local stores.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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