Designer Furniture Warehouse here has filed for Chapter 11 bankruptcy protection with plans to close all but one of its 10 stores.
In its petition filed Nov. 13, the retailer listed assets and debts both in the $1 million to $10 million range.
Ashley Furniture is No.2 on the list of largest unsecured creditors, with the largest industry claim of $220,224.
According to a release, DFW has asked the court for approval of going out-of-business sales at nine stores in Ohio and Pennsylvania. Planned Furniture Promotions would manage the liquidation sales.
DFW liquidated its showroom in Huntington, W.Va., before the filing and it is not included in the new GOB plan.
DFW intends to continue operating its Columbus store under the plan pending court approval, said Andrew Robinson, a partner in the company.
"Up until 10 days ago, we had intended to close only three stores and emerge with a company that was profitable," Robinson said. However, DFW couldn't reach an agreement on an out-of-court reorganization plan it was negotiating with its vendors, he added.
Tom Liddell, PFP senior vice president, said that in an unusual move, secured creditors have agreed to a "carve out" of money to ensure existing customer orders are fulfilled.
That's a refreshing change from several industry bankruptcies in recent years, in which consumers were left with no furniture despite having put down deposits prior to the filings, he said.
"That's not going to be the case here," Liddell said. "The way it's structured, customers are going to get their furniture."
In the release, DFW President Charles Kidder said this was an important aspect of the filing.
"DFW Furniture wanted this bankruptcy to have as little negative impact on our loyal customers as possible, so we worked very closely with our legal team and the bankruptcy court to put our customers first," he said.
If the liquidation is approved by the court, the sales would probably begin in the second or third week of December, Liddell said.
Other industry suppliers listed among DFW's largest unsecured creditors and their claims are Vaughan-Bassett, $42,729; Jackson/Catnapper, $41,170; Simmons, $34,093; Five Star, $31,130; Woodcrest Sales, $21,124; and Carolina Mattress Guild, $20,119.
