Furnishings 2000 Cites Reason for Shutdown

TIMES STAFF WRITER

Furnishings 2000, which earlier this month entered bankruptcy proceedings and closed all of its 37 stores in California, announced Wednesday that a shortage of funds had forced it to "cease operations."

Company executives did not return telephone calls, but in a prepared statement, a Furnishings 2000 spokesman said that it has filed a motion with a U.S. Bankruptcy Court judge in New York City that would require the company's secured creditor, "which has a security interest in all of the company's inventory, to remove the inventory collateral from the company's stores and warehouses and to pay rent until the inventory is removed."

In the prepared statement, Furnishings 2000 spokesman Dan Morris said that the company has "only an outside chance" of arranging financing needed to operate its stores. Without alternate financing, the company "anticipates that proceeds from the sale of its store leases and other assets will be insufficient to pay all creditor claims in full," Morris said. "In that event, no distribution will be available to stockholders."

Furnishings 2000, which was a San Diego-based company when it completed its initial public offering in 1983, since has moved its corporate headquarters to Mira Loma. The company has reported only a handful of profitable quarters since its initial public offering.

Last year, GF Holdings, a privately held, New York-based company, acquired 67% of Furnishing 2000's shares.

The company, which operated 37 stores in California, has five stores in San Diego County. Employees at those stores have been furloughed, a company spokesman said last week.

Furnishings 2000 customers with complaints or questions have been directed to contact the clerk of U.S. Bankruptcy Judge Burton R. Lifland at the Southern District of New York in New York City.

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