Beleaguered but mainstream British retailer Comet Group has another problem to deal with. Microsoft Corp. today issued proceedings against it for allegedly creating and selling more than 94,000 sets of counterfeit Windows Vista and Windows XP recovery CDs.

The legal filings contend that the alleged counterfeits were sold to customers who had purchased Windows-loaded PCs and laptops. The suit charges Comet with producing the counterfeits in a factory in Hampshire, U.K., and then selling the discs to customers from its retail outlets across the country.

Comet has not yet had the opportunity to respond to or comment on Microsoft’s action.

Comet has been a fixture in the U.K. retail landscape for over 75 years, but the past few have been unhappy ones. The company operates 248 U.K. stores and employs approximately 10,000 employees, yet in November agreed a sale to private equity firm OpCapita for pocket change (£2, a little over $3). Under terms of the deal, Comet’s French parent company Kesa Electricals retains responsibility for the Comet pension plan, which has a deficit of over $60 million, and invests £50 million (roughly $78 million) to sweeten the deal still further. “The £50 million is categorized as an investment. We had to pay £50 million to get the business away. We will write it off as having no value,” Kesa chairman David Newlands told The Guardian newspaper.

David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft, today issued the following statement: “As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom. Comet’s actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too.”

Related links:

Microsoft’s statement –

Photo courtesy of Comet Group