Many Still Waiting For Furniture From Raleigh Company Filing For Bankruptcy
Posted June 28, 2005 2:24 a.m. EDT
RALEIGH, N.C. — More than 160 people who paid for furniture from Furniture Liquidation Warehouse have yet to see what they paid for due to the company filing for bankruptcy. Now the question is whether they will ever see their furniture?
Catherine Anderson is ready to fill up her new apartment with furniture, but there is one problem. She does not have the couch or love seat she ordered.
"It is kind of sad. Just my futon and my TV -- it's not really what I envisioned in my apartment when I moved here," she said.
Anderson found the sofa set she "envisioned" at Furniture Liquidation Warehouse in Raleigh. She paid more than $1,200 up front on May 1. It was supposed to arrive within six weeks.
During the sixth week, Anderson called the store. A recorded message said the company filed for re-organization under Chapter 11 bankruptcy.
"I panicked. You know I didn't know what to do. I didn't know what my options were -- if I had just completely lost everything or if there was something I could do about it," Anderson said.
Anderson is one of several customers who called Five On Your Side, who contacted the company's attorney, Doug Wickham.
"There is a mechanism in place that I think will enable many of them to get their furniture. That's the goal," Wickham said.
Wickham said the company did not have enough money to pay suppliers, so they stopped filling orders. Under a court agreement, a third party company will now fill outstanding orders and hold a liquidation sale to raise cash for creditors.
However, what about the possibility of refunds?
"I guess the short answer is we're not free to say, 'OK, we'll just give you your money back. We can't do that,'" Wickham said.
Under bankruptcy law, customers who have already paid are considered creditors. Plus, if and when any creditors will be paid the bank is first in line.
Anderson said she feels, under the circumstances, the store should not have accepted her $1,200.
"They've known that something was wrong and I just wish someone would have told me, so I could have made other arrangements," she said.
Customers who get their furniture will find out within the next two weeks when it will arrive. The problem is if it is not available, they will have to wait until the sale process is over to see if there is any money left for refunds.
People who paid with credit cards have the most protection because they can dispute the charges if they do it within 90 days of payment.
All bankruptcy is not the same. Furniture Liquidation filed Chapter 11, which is often referred to as re-organization. Companies operating under Chapter 11 are protected from creditors while working to use future earnings to pay off those debts.
Companies who file Chapter 7 are completely out of business. Any assets are sold and proceeds go to the bank. It is rare for customers to get anything back under that type of bankruptcy.