Loves Furniture files for bankruptcy
Warren-based Loves Furniture Inc. has filed for reorganization under Chapter 11 bankruptcy after purchasing Art Van Furniture stores less than a year ago.
The company, owned by Dallas-based hedge fund U.S. Assets Inc., filed for bankruptcy Wednesday, listing between $10 million and $50 million in liabilities, according to court documents. The company lists 20 unsecured creditors to whom it owes over $30 million, including $9.2 million to Assembly Media in New York.
The filing came less than a week after it was sued for $1.8 million by two Mississippi-based suppliers.
Max Newman, a Detroitbased attorney representing Loves, told The Detroit News: “What we hope to do is to turn what we have, which is excessive inventory, into cash to best satisfy the parties and interests to our case — our creditors, our customers, every other stakeholder in the case.”
Newman said the company has problems with logistics and higher expenses than anticipated.
This is the second bankruptcy involving the furniture retailer in less than a year.
Art Van announced last March that it was filing for bankruptcy and would be conducting liquidation sales. But later that month it suddenly closed operations after the COVID-19 pandemic hit.
US Assets last May purchased 17 former Art Van leased store locations in Michigan, and 10 other Art Van and Levin and Wolf locations in five other states for $6.9 million. U.S. Assets announced the stores would reopen as Loves Furniture & Mattresses. Liquidation sales were held at stores beginning in July.
Loves announced in August it had hired about 350 people and was looking to add 1,000 employees to eventually open 18 locations in Michigan and additional stores in other states.
But in December, Loves said it was closing eight stores as part of a consolidation of its total of 32 stores in Michigan and other states into 13 locations –- a dozen in Michigan and one near Toledo.
Newman told The Detroit News that 13 stores are holding going-out-of-business sales organized by Connecticut-based Planning Furniture Promotions, with plans to reopen a dozen locations.
“We’re hoping to maximize the value of all of our inventory, do the best that we can to satisfy customers, and if the sales are very successful, to have enough cash to be able to reopen 12 stores at the end of the entire process,” he said.
The company says there are between 100 and 199 creditors and says its assets are valued at between $10 million and $50 million.
Other top unsecured creditors include: Kuehn & Nagel in Laredo, Texas, $3 million; SFV in Redford Township, $1.8 million; KUKA in Hong Kong, $1.7 million; and Penske Logistics in Philadephia, $1.6 million, documents say. It also owes Fairmont Sign Co. in Detroit over $800,000.