7 On Your Side
Levitz furniture files for bankruptcy
HAYWARD, Calif., Nov. 27, 2007 (KGO) (KGO) -- Levitz furniture used to be one of the biggest home furniture retailers in the country. Now it's going through its third bankruptcy in 10 years. What's that mean for you?
We've learned that Levitz is putting everything up for auction Wednesday morning. It's not clear whether that will mean total liquidation, or new owners. Today, customers were still shopping at Levitz and many were surprised to hear the company is on the block.
It looked like business as usual at the Levitz store in Hayward Tuesday. Customers said they didn't know about the bankruptcy.
Horst Breuer of Alameda was looking for computer furniture at Levitz. Nobody told him the place could be going out of business.
"They should be honest and tell us 'you know, we're going out for bankruptcy and we're giving everything at half price,' or whatever they're going to mark the furniture down for."
Levitz filed for Chapter 11 bankruptcy in New York just this month. Documents show the company has been losing money since the last bankruptcy two years ago -- even though new owners poured millions into the business.
Levitz wanted to auction off its assets before the holiday season so that any big sales could take place during the busy shopping days.
Court papers say Levitz is holding about 12 million in deposits from customers. What if that's you?
"If you buy something and there's a problem with it, the store isn't here anymore. You have to deal with the manufacturer," says Iain Macdonald, bankruptcy attorney.
Macdonald says consumers who put down deposits can always make claims with the bankruptcy court if they don't get their furniture. However, customers have to stand in line with everybody else who's owed money.
The number seven priority is the consumer who put down a deposit and didn't get their furniture. A Levitz statement says "court filings do request approval to continue fulfilling existing customer orders and honoring customer deposits. Levitz has obtained the consent of its lenders to use funds to continue to operate its business. At this juncture, anything further would be speculative."
7 On Your Side has heard from several consumers who have not received orders they placed months ago. They are told they can't get refunds because of the bankruptcy proceedings. We'll keep you posted on what happens after the auction Tuesday.
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