5 On Your Side

Bankrupt Furniture Store Leaves Customers Standing

Posted January 17, 2007 6:24 p.m. EST
Updated March 21, 2007 2:28 p.m. EDT

— A trustee is sorting through claims made against a bankrupt furniture store in Cary.

NC Home Furniture went out of business last month, stranding dozens of customers who had put down deposits for furniture but never received the items they ordered.

Laura Neely put down more than $1,900 for an armoire and bookcase at the store in June. She said she was told she would have the items within 2½ months.

“We were pretty excited and hoping they would be here before we had company for the holidays, but no such luck,” she said.

Neely repeatedly called and e-mailed to check on the status of the shipment. At the three-month mark, she said she was told it would be another three weeks.

“When I called back in three weeks, the store had been closed. At that point, I knew there was an issue,” she said.

NC Home Furniture continued to take orders online, so Neely said she kept e-mailing the owners. In November, Neely got an e-mail saying the shipping company would pick up the furniture in a few days.

That never happened, and a month later, NC Home Furniture owners Max and Kelly Godfrey filed for bankruptcy.

“I was just stunned -- stunned -- and then I was mad,” Neely said.

Forty people filed complaints against the furniture store with the state Attorney General's Office, and 166 complaints were lodged with the Better Business Bureau. The BBB actually revoked the store's membership in April.

Attorney David Warren has been appointed the bankruptcy trustee for the store and is in charge of getting customers refunds.

“I want to get them paid as badly as they want to get their money,” Warren said.

He is responsible for collecting all of NC Home Furniture's assets, selling them and paying creditors, including customers like Neely. But he said it's not yet clear how much those customers will get back, noting that the process could take a year.

“We just have gotten all the collateral in, the inventory in. We're assessing it right now,” he said. “They're are probably in better shape with the company being in bankruptcy (and) having an independent trustee appointed than not.”

Customers who made deposits should get a "proof of claim" form in the mail within the next couple of weeks, Warren said. They need to fill it out and submit it to the bankruptcy court by April, he said.

Warren said customers can't just claim their furniture, even if it's part of the seized inventory, because of the logistical problems it would create. The only fair way to resolve the creditor claims is to sell everything and work with cash, he said.

If you order online or over the phone, you're protected by the Federal Mail Order rule, which states that if the furniture isn't delivered by the estimated date, the consumer has the option to re-schedule delivery or get a refund.

Buying with a credit card gives people protection.  Credit card users have 120 days to dispute a charge if they file the dispute in writing.

Neely said she has learned a lesson.

“I think we spend a lot of time picking out the merchandise we want and getting the right brand and exactly what we want. But we don't spend enough time trying to figure out who are we going to buy it from and why would we buy it from those people,” she said.