Sharper Image lawsuit helps cardholders

CHICAGO (WOOD) - A recent class action lawsuit against electronics retailer Sharper Image is breaking new ground and paying back gift cardholders despite the fact the company declared bankruptcy.

Sharper Image was best known for selling novelty gadgets -- a business model that would prove impossible to maintain in an economic recession. The company filed for bankruptcy in February 2008.

At the time of that bankruptcy, about 500,000 people held Sharper Image gift cards totaling $19 million in unredeemed value, and there was little hope of getting any value out of them.

In most cases, gift cardholders are out of luck if a retailer goes out of business. But, a recent class action lawsuit filed by Chicago law firm Krislov & Associates has bucked that trend.

This is a first, according to the firm's owner Clint Krislov.

"This is really the first time that anyone has achieved recovery for gift cardholders in a bankruptcy," Krislov said. "It is sort of like Christmas in July."

The bottom line: there is money out there for people who purchased gift cards from Sharper Image before it filed for bankruptcy -- even if you don't have your card anymore. The United States Bankruptcy Court for the District of Delaware has set aside about $2 million in Sharper Image assets to reimburse gift cardholders.

Gift cardholders can file a claim online.

How much? If a gift cardholder still has the gift card, he or she may be able to redeem the entire value of the card. If the cardholder does not, the maximum possible claim is $100. The deadline to file a claim is Sept. 1.

A word of warning: if people file false claims, the dollar amount available for reimbursement to valid claimants may drop substantially.

It is not known at this time if this case will have any impact on other bankruptcy cases.

WOOD TV8 producer Lindsay Ropp's brother works at Krislov & Associates.