Rosenberg firm, retailer pay to settle suit over sale
By Clint Engel -- Furniture Today, January 20, 2002
BOSTON — BOSTON — Gene Rosenberg's Planned Furniture Promotions firm and a local retailer are paying $270,000 to settle a lawsuit in which the state attorney general charged the two with operating an illegal going-out-of-business sale.
Retailer Dean's Home Furniture and Planned Furniture Promotions violated state consumer law by deceiving customers with phony markdowns off fictitious original prices on more than $800,000 in new goods, according to Attorney General Tom Reilly. The sale was held for several weeks in 2000 at a closing Dean's Home Furniture store in Dedham, Mass.
Connecticut-based Planned Furniture Promotions is paying $230,000 in restitution to consumers and a civil penalty of $25,000. Dean's, led by Dean Weinstein, will pay $15,000 in administrative costs.
Rosenberg and Weinstein deny the charges.
Attorney General Reilly said the settlement "sends a strong message to store owners and liquidators that putting a going out of business sign on the door and then breaking the state's law around specialty sales will not go unnoticed."
The settlement is expected to benefit more than 2,000 Dean's customers who will receive checks totaling about 15% of the amount paid for goods during the sale.
In denying wrongdoing, Rosenberg and Weinstein called the settlement a "compromise of a doubtful and disputed claim" and said "there was nothing whatsoever deceptive in the subject sale."
"It became a political thing. The whole thing was ludicrous," said Rosenberg, president of Planned Furniture Promotions. He said that what's called a GOB sale actually was a store closing sale and "that really wasn't what caused the problem."
Rosenberg said the problems stemmed from early in the process, when a manager from Planned Furniture went to the local community for a license to run the promotion, but was told a license wasn't necessary.
"Our attorney concurred," Rosenberg said, so Planned Furniture did not obtain the license — which turned out to be necessary.
"Our lawyers really made a faux pas," he said. "It was a really expensive faux pas." The company decided to settle "just for peace and the fact that we want to run sales in the state in the future.
"In 40 years, we've had six problems out of 3,000 sales," he said.
Frank DiMento Jr., an attorney for five-store, midpriced Dean's, said the attorney general's charges took the company by surprise. Dean's signed a contract, handed over responsibility for the sale to Planned Furniture and "just felt confident these people knew what they were doing," he said.
Dean's believed it had a strong good defense, but like Rosenberg, decided it would less expensive to settle, DiMento said. He added that the fact that Dean's is paying only $15,000 and none of it for restitution "speaks volumes to the fact that Dean's had no knowledge of anything that was allegedly illegal."
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