Kang’s Distribution Inc. (KDI), the largest Korean phone card suppliers, is bankrupt. The retail stores selling KDI phone cards are left helpless as complaints from customers are piling up.
Since KDI has collapsed, its phone cards stopped working. The customers who have already purchased the cards are obviously demanding refunds. It has been reported that 2,477 businesses have been selling KDI phone cards.
“We’re constantly getting customers who are asking for refund on the phone cards since yesterday afternoon,” said an owner of a market on Pico Boulevard in Koreatown. “We have about $1,000 worth of phone cards. We’ve suffered a loss of more than $2,000 if we count the cards that we’ve already sold.”
A doughnut shop nearby was also selling KDI phone cards. “I had no idea that the company went bankrupt,” its owner said. “What can I do to get refund? Help us!”
A liquor store owner in El Monte said: “We kept getting customers who said that the phone card is not working, so I first thought there was something wrong with the card. We have over 200 cards left in stock. I’ve dealt with KDI since it first started about 20 years ago. How could they do this to me?”
The loss for retailers may continue, but it would be difficult for them to earn any compensation.
“The fact that KDI has filed for Chapter 7 bankruptcy is another way to tell its creditors that they don’t have the funds to compensate their partners,” said Mi-yeon Lee, an attorney specializing in bankruptcy. “It’s realistically impossible for creditors to be compensated at this point.”
Back in 2006, KDI was a business that recorded up to $110 million in sales revenue. Now, KDI reported that it does not have the financial resources as its total asset is below $50,000.
Some retailers are accusing KDI of strategically planning its bankruptcy.
Meanwhile, the meeting for KDI and the group of its creditors will be held on July 18 at 9 a.m. in Santa Ana.
By Sangho Hwang