Sharper Image Claims Reimbursing Customers Will Cause Bankruptcy

Financial experts for retailer Sharper Image are expected to testify today that the company could be pushed into bankruptcy if it is forced to pay up to $900 million to settle a class action lawsuit being pushed by 27 state attorneys general and several plaintiffs attorneys.

At a final fairness hearing today, U.S. District Judge Cecilia Altonaga must weigh Sharper Image's financial health against the demands of various plaintiff groups and attorneys general who want customers compensated for $300 air purifiers they say were ineffective.

An estimated 3 million consumers have purchased the San Francisco-based company's Ionic Breeze purifiers since 1999. The machine, which was supposed to remove dust, pollen and other pollution from household air, did not work and in some cases caused more health problems, such as allergies, according to consumers.

Consumer Reports magazine slammed the device in one of its issues.

Details here from the Daily Business Review via Law.com.

Comments

[Angie Hartford]

It's pretty much impossible to have any sympathy for Sharper Image in this situation. Asking for a refund for a dysfunctional product seems entirely reasonable. Had Sharper Image been more aware of the quality of the products they sold, this could've been handled much sooner, at significantly less cost.