UPDATE: Hudson's Ashley stores file for Chapter 11 over lease
Move succeeds in reopening store that was closed
Larry Thomas -- Furniture Today, July 23, 2010
SANFORD, Fla. — The operators of five Ashley Furniture HomeStores in North Carolina filed for Chapter 11 bankruptcy protection Thursday to force the reopening of a store that a landlord had locked down, they say.
DeShon Hodge, a partner in the licensed HomeStores with Fred Hudson, CEO of Sanford, Fla.-based furniture retailer Hudson's, said the store was reopened Thursday after the filing and is open again today.
FreDe Enterprises LLC made the Chapter 11 filing in U.S. Bankruptcy Court for the middle district of Florida, listing assets and liabilities both in the $1 million to $10 million range.
Among the unsecured home furnishings creditors is Sealy, with a $127,225 claim, and HomeLine Furniture, with a $3,651 claim. Also listed is furniture protection plan servicer Montage Furniture Services with an $11,130 claim.
Ashley was not listed among the largest unsecured creditors, which may indicate that it is a secured creditor.
Neither Hodge nor Hudson would identify the landlord or say which of the five North Carolina stores was padlocked. The unsecured creditors list shows two "lease property," creditors: Glensford II with a $298,441 claim and SamCo Properties with a $127,225 claim.
"We were trying to renegotiate a lease we could live with long-term," Hudson said, but the landlord locked the store on Tuesday. Hudson and Hodge say their attorney believes it's a case of "improper termination of lease," and said the Chapter 11 filing would enable them to get back to business at the showroom.
Hodge declined to comment on whether the retailer recently had been making rent payments to the landlord.
In June, the two said they would close two HomeStores this month in Durham and Goldsboro, N.C., with plans to relocate one in a better site in the Raleigh-Durham area and possibly open a new format at the Goldsboro location. That hasn't happened yet, but Hudson said it's still the plan.
Hodge and Hudson operate three other HomeStores in North Carolina in Raleigh, Fayetteville and Clayton. They declined to disclose the stores' annual sales.
Hudson's, combined with the five Ashley Furniture HomeStores, was No. 83 on Furniture/Today's latest Top 100 ranking with estimated sales last year of $57 million.
The Hudson's business filed for Chapter 11 bankruptcy protection in May primarily to restructure real estate debt, Fred Hudson said. He said Thursday that the reorganization process was going well and the retailer still expects to emerge from bankruptcy in November.
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