San Diego : Lawsuit Settled in ‘Liquidation Sale’

A business that held a widely publicized “liquidation” sale of video and stereo equipment agreed Wednesday to settle a civil lawsuit that alleged unfair business practices and deceptive advertising, according to court records.

Without admitting any liability, U.S. Electronics Inc., a stereo and video retailer, agreed to pay $100,000 to settle the suit, brought by the San Diego County district attorney’s office. San Diego Superior Court Judge James R. Milliken approved the settlement.

The suit alleged that, from October, 1991, through January, 1992, U.S. Electronics ran radio ads touting a “salvage sale” that had been “ordered” to dispose of the “total inventory” of Mad Jack’s, another stereo and video retailer that had just declared bankruptcy.

Only about a third of the goods on sale at two locations, in Chula Vista and near the San Diego Sports Arena, came from Mad Jack’s, the suit said. The rest came from a variety of sources, it said. Though the ads may have suggested that a bankruptcy court ordered the sale, no court did so, the suit said.

The ads promised discount prices, the suit said. But the extent of any discount remains unclear because Mad Jack’s had never sold many of the items offered by U.S. Electronics, the suit said.