New details behind the dissolution of the sneaker resale company Zadeh Kicks LLC have emerged. On Thursday, the appointed receiver of the case, David P. Stapleton, submitted the Initial Inventory and Report on the company’s dissolution to the circuit court of Lane county in Oregon, which shed some light on new details regarding the operation of the company itself.
According to the latest documents, Stapleton has been working with the FBI to gather the personal assets of Zadeh Kicks LLC’s owner, Michael Malekzadeh, and to date, the government has taken custody of approximately 1,100 pairs of sneakers along with watches, jewelry, handbags, and approximately $6.1 million in cash.
Elsewhere in the report, it was revealed that Zadeh Kicks had approximately 60,000 pairs of sneakers in its inventory before Malekzadeh filed to dissolve the business. The inventory was acquired from a variety of other sneaker resellers, with approximately 100 pairs currently subject to a pending insurance claim from damage at the facility prior to the receiver’s appointment. Of the 60,000 pairs, approximately 48,339 were Nike and Jordan sneakers.
Despite the company’s current inventory, the document confirms that “The receiver (Stapleton) does not plan to resume fulfillment of shoes in the ordinary course and instead is focusing his efforts on a sale strategy to maximize recovery from the inventory for the benefit of all creditors.”
Malekzadeh filed in court on May 19 to voluntarily dissolve the company as well as to take possession, control, management, and operation of his assets, as the rapid growth of his company has rendered him unable to maintain the business. For the dissolution, Zadeh Kicks requested the court to appoint a receiver who was responsible for managing the assets and paying back the company’s creditors.
Zadeh Kicks operated primarily by offering sneaker preorders to its customers as buyers would typically pay months in advance for sneakers that either have yet to be released or pairs that have not been confirmed to be dropping. This business model has left customers with outstanding orders and is said to exceed millions of dollars in total.
Under Oregon law, a receiver of the appointed case must file updates with the court within 60 days and every two months, with the next update scheduled to arrive before September.