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MAPP Plastics Discussion Forum

The MAPP Plastic Industry Discussion Forum allows members to rapidly communicate with each other. Post both questions and answers to questions that other MAPP members have about any industry topic from material and process issues to R&E Tax Credits and other business issues.

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Posted:  17 Jun 2017 01:48
We have accumulated more than 200 molds over the years, which, for one reason or another, are now obsolete and/or inactive. The owners have essentially abandoned them and cannot be located. They are taking up valuable warehouse space and we need to dispose of them.
I'm sure this is an ongoing problem and I would appreciate any thoughts/suggestions of the MAPP members who have faced the same situation. What is the legal process you pursued in  disposing of abandoned molds?

Ralph Riehl
Posted:  25 Oct 2017 17:36
Hello Ralph:  I don't see that you ever received an answer to this question. 

1.  If you own the mold, you can scrap it, sell it, or dispose of it (assuming your contract/PO with the customer does not restrict such action).

2.  If the customer owns the molds, but you are still owed money by the customer, then you can sell the mold and apply the sale proceeds to the debt the customer owes you.  Alternatively, you can sell as scrap and apply any money you receive to the debt.  In such a case, send a letter to the last known address you have for the customer telling the customer you are going to scrap or sell the mold and apply the money you receive to the debt the customer owes.  Keep a copy of the letter in your file (even if returned because the customer is now out of business).

3.  If the customer owns the mold, but does not owe you any money, then just write a letter (sending to last known address) stating:  "We have in our possession several molds owned by you.  Those molds [identify the molds by number or part name] have been inactive for some time.  If we do not hear from you within 30 days, we will make arrangements to dispose of the molds and invoice you for the costs associated with such disposal."   By saying that, you provide ample notice for them to act, and you leave open to either scrap the molds or sell them.  Then, go ahead and get rid of the molds as you deem most economical to you.  If you sell them, deduct from the sale proceeds a reasonable fee for past storage, and send the excess (if any) to the customer.  But, if the customer no longer exists, just keep the sale proceeds. 

-Alan Rothenbuecher
har@beneschlaw.com
Posted:  08 Nov 2017 17:37
Great information, Alan.

I would add that before scrapping any tooling, you may  want to check the terms and conditions of the customers of the tools you are considering scraping.  Some automotive suppliers are required to support service work for 20 years after end of production. This will vary depending on which of the automotive companies you are doing business with.  Not sure if that would apply in the case above, but something to keep in mind.

Kathy Dobie
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