PITTSBURGH — During a bankruptcy court hearing in Georgia on Monday, customers of Home Décor Outlets hoped for answers about whether they would get any of their money back.
The furniture store closed its Pittsburgh location on Liberty Avenue without warning earlier this year, leaving many customers without their furniture or refunds of layaway payments.
“It’s not right. We ought to get our money,” said Home Décor customer Stacey Dorsey of Brighton Heights, who first contacted 11 Investigates in June about her problems with the company.
All the signs at Home Décor’s former Liberty Avenue location are gone from the shuddered building. It is one of many locations closed this past year. The company had as many as 17 stores throughout the southeastern United States, but only two are still open according to the court filing requesting Home Décor be forced into liquidation.
Biggest creditor requests liquidation
Today’s hearing was prompted by Home Décor’s biggest creditor, a loan company it owes more than $2.5 million.
Crossroads Financial Group filed a motion with the Georgia Bankruptcy Court asking the judge to convert Home Décor’s bankruptcy from Chapter 11 to a Chapter 7 that requires the company to sell off its assets to pay creditors.
As Home Décor’s biggest secured creditor, Crossroads would be first in line to get paid, while customers like Dorsey would likely be at the end of the line to get any reimbursement.
In its motion to the court, Crossroads Financial insisted it was futile for Home Décor’s bankruptcy to continue as a Chapter 11 reorganization, saying Home Décor “is hanging on by a wing and a prayer,” has failed to come up with a plan to repay its debt and continues to default on its payments.
The motion also revealed that, despite its bankruptcy and uncertain future, Home Décor secured a lucrative payment in pandemic relief from the federal government in May. The furniture company received more than $250,000 in employee retention tax credits from the Internal Revenue Service. Photocopies of the checks were attached to the motion. Crossroads Financial alleged that Home Décor “squandered” that money.
Despite those dire pronouncements, during the hearing, Crossroads Financial’s attorney Matt Weiss asked the judge to hold off on a decision and continue the hearing at a later date. He told the judge that in the past few days they made progress with Home Décor in negotiating what he called a “global settlement.” Weiss said they now believe there is “a realistic prospect of reaching a resolution.”
The judge granted the request to continue the hearing at a later date but before ending the session asked if other creditors wanted to be heard by the court.
Customers want their money back
Dorsey was among more than 20 creditors who dialed in to listen to the bankruptcy hearing after receiving notice in the mail that her rights could be impacted.
Dorsey, who is on disability, has receipts showing she paid Home Décor nearly $386 for furniture on layaway but never received the merchandise.
“It’s not much, but when you’re on a fixed income, it’s a lot,” she said.
“They (other customers) haven’t gotten their money back, so I am not alone,” she said. “Some of them even had their furniture paid-in-full and hasn’t even gotten their furniture. Very frustrating. Very frustrating.”
A handful of customers spoke up when the judge asked if they would like to be heard.
Dorsey expressed her frustration that Home Décor continues to send invoices to customers even though the local store has closed.
Another creditor, who identified herself as Rachel Lassiter, also addressed the court, saying she opposed “any motion that allows Home Décor to weasel out of paying the money they owe to customers.”
The judge advised all customers with ongoing issues to contact Home Décor attorney Henry Sewell directly.
Since last year, the Pennsylvania Attorney General has received 26 complaints about Home Décor’s Pittsburgh location.
The AG’s office told 11 Investigates it is premature to say that customers who filed complaints are “out of luck,” because the bankruptcy case is ongoing and it has not yet been determined how Pennsylvania consumers will be treated in the case.
Home Décor still billing customers
11 Investigates Angie Moreschi broke the story that Home Décor filed for bankruptcy in February but continued to give the impression that it was still operating in Pittsburgh, invoicing customers and providing store hours, as if it were still open.
Dorsey received yet another invoice this month.
“This is the statement and they wanted me to pay by Aug. 16,” Dorsey said showing 11 Investigates the invoice.
In response to our reporting, the attorney general’s office advised customers not to pay the company any more money, and sent a letter of concern to the U.S. Trustee handling the bankruptcy regarding Home Décor’s tactic of continuing to invoice customers.
“Any Pennsylvania consumers who are still being invoiced for items on layaway should not make any additional payments,” AG Communications Director Jacklin Rhoads wrote in an email to 11 Investigates, adding, “It is important that individuals who have paid for services not received file a proof of claim with the bankruptcy court.”
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