Beloved retailer moves from Chapter 11 bankruptcy to liquidation

The third-generation family-owned company will not survive and customers have questions about unfilled orders.

Feb 4, 2024 - 20:30

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Beloved retailer moves from Chapter 11 bankruptcy to liquidation

When some chains go bankrupt, they may owe vendors and employees money, but very few customers get affected. Individual shoppers may end up with gift cards they can't use or items they wanted to return, but in most cases that's the worst of it.

That's what happened when Bed Bath & Beyond, Tuesday Morning and Christmas Tree Shops went through the Chapter 11 process and ended up in liquidation. It was sad for longtime customers — all three of those brands had dedicated fanbases — but few of those customers ended up not getting the items they ordered.

When furniture chain Mitchell Gold + Bob Williams abruptly closed, however, thousands of customers were left in limbo. Some had orders outstanding and had paid for shipping, but the bankrupt company had not paid its delivery partners, leaving those orders stranded at various shipping companies.

In that case, the bankruptcy court approved a deal where people who had furniture sitting at various shipping companies could pay again and then have their orders delivered. That wasn't a fair solution for people who had already paid, but it was likely worth it for them to do so to get their orders delivered.

A similar problem was avoided when David's Bridal managed to find a buyer. That deal meant that thousands of women got wedding dresses that they had ordered, which may not have happened in a liquidation situation.

Another popular furniture chain filed Chapter 11 bankruptcy after its owners had expressed hopes that the company would survive. Now, it has moved into a liquidation phase.

Ruby Gordon has moved from Chapter 11 bankruptcy to liquidation.
Image source: Shutterstock

Regional favorite retailer planned to survive

When Ruby Gordon, a Rochester N.Y., furniture chain filed for Chapter 11 bankruptcy, it reported that it owed money to between 100 and 199 creditors. At the time of the filing the company was confident that it could reach deals with its creditors and survive.

“We’ve been struggling to recover since 2020. Unfortunately, in the last eight months, too much went sideways in too short an amount of time," the company's owner and chief executive, Aaron Ruby, told Furniture Today.

Klaussner Furniture, an Asheboro, N.C., furniture manufacturer, "going out the way they did was the straw that broke our back,” Ruby said. “We’re hoping that Chapter 11 gives us a chance at having a future; we’re just not certain exactly what that will look like.” Klaussner Furniture, an Asheboro, N.C., manufacturer, shut down in early August.

Ruby Gordon has been part of the upstate New York community for nearly 90 years.

"With a history dating back to 1936, we are committed to bringing the best designs and best customer service to our customers," the company said on its website. "We are a third generation, family-owned furniture store with a passion for making your space a home."

Currently, "43 customers listed in the bankruptcy filing, all folks who paid for furniture they never got. Total owed to these folks? Around $5,480,000.23," according to Rochester's News10NBC.

Ruby Gordon begins liquidation

While the Ruby Gordon website still operates, customers can currently only look at merchandise. They can see what the retailer might have, but purchases have been halted pending an upcoming liquidation sale.

In fact, the first thing seen when you visit RubyGordon.com is a large banner headlined "Big Sale Coming Soon." That's followed by "Watch Out for Our Chapter 11 Bankruptcy Liquidation sale.

More Bankruptcy:

That sign confirms that the company will be liquidated and won't be reorganizing, which is usually the goal of a Chapter 11 filing.

Customers waiting on their orders did get some good news. Ruby Gordon's bankruptcy lawyer, Ray Stilwell, told News10NBC that customers who paid for merchandise would either receive it or be "made whole."

Ruby Gordon's liquidation sale, which has not started, will last for 180 days (or presumably shorter if all merchandise gets sold).