Q & A : What Barker Bros.’ Clients Should Know
A U.S. Bankruptcy Court trustee has been appointed to oversee the Barker Bros. liquidation, but customers with deposits at the furniture retailer may have to wait months before their claims are settled.
The 111-year-old firm was Southern California’s oldest furniture chain; it closed Friday and filed for bankruptcy liquidation Monday. Its owners, a San Francisco investment partnership that bought the retailer in 1989, blamed their problems on heavy debt as well as the recession, which has forced several regional furniture retailers into bankruptcy.
What should you do if you’re one of the customers with a deposit at Barker Bros.? Here are answers to some of the most frequently asked questions:
Q. Who will be the trustee?
Gary Plotkin, an Encino attorney who has served as trustee in several other Southern California bankruptcies in recent years, has begun sorting through the Barker Bros. case in an effort to expedite the handling of what is eventually expected to be as many as 3,000 claims from customers who made deposits totaling $3 million with the now-defunct furniture chain.
Q. What does a trustee do?
In most bankruptcy cases, trustees oversee the disposition of the company’s assets and weigh the claims filed by creditors, bondholders, consumers and other interests. One of Plotkin’s duties will be to handle claims from customers who either made deposits on or paid in full for furniture that had not yet been delivered when the retailer was forced out of business Friday.
Barker Bros. attorney Cindy Futter, of Milbank, Tweed, Hadley & McCloy in Los Angeles, said customer deposits total about $3 million. The figure represents orders for more than $6 million in furniture, she said.
Q. What should I do if I ordered merchandise and made a deposit but don’t yet have my goods?
Patience is a must in bankruptcy proceedings. Your first step is to contact the company’s attorney, Milbank, Tweed, Hadley & McCloy in Los Angeles at (213) 892-4000. The switchboard operator will connect you with a tape-recorded message that asks you to give your name, phone number and other information. The law firm says it is returning calls as quickly as it can.
Q. Should I call the trustee?
Absolutely not. Plotkin said he is not equipped to handle individual calls and a deluge would delay his efforts to sort out the case. In addition, he said, he has not yet seen any company records.
Q. Do I stand a chance of getting my merchandise--or a refund of my deposit?
This is a tricky question, with no easy answer in any bankruptcy case.
Barker Bros. Chairman Dennis Wong has said deposits received after Oct. 25 have been refunded, because that was the day the company’s cash accounts were seized by its principal lender, setting the stage for the bankruptcy filing.
Deposits made before then fall into a broad category that the trustee will sort out by group. The groups will be based on such factors as whether the furniture has already been delivered to Barker Bros. and is awaiting transfer to a customer, whether the merchandise is nearing completion at the manufacturer or whether the manufacturer has begun completing a customer order.
Futter said she is asking Plotkin, as trustee, to take possession of completed furniture now in the company’s warehouses and deliver it to customers in exchange for the balance due on their accounts.
Q. How will the trustee proceed?
Plotkin said he will respond to Futter’s request to speed delivery of merchandise in Barker Bros. warehouses after making a case-by-case evaluation of whether the cost of delivering the goods to customers would be greater than the balance due on them.
“I am sympathetic to the plight of the customers and will make every effort to deliver the goods,” he said.
Plotkin said his office will be contacting customers who have made a deposit within the month to discuss the status of their orders. However, he said, it may take far longer for goods to be delivered.
Tips for Barker Bros. Customers Gather all your paper work. If you’ve made a deposit on new furniture, put together a file of your order, records of any deposit and other papers pertinent to the deal.
Call Barker Bros. attorney Milbank, Tweed, Hadley & McCloy in Los Angeles at 213-892-4000 and leave a recorded message with your name, phone number and details of your order. You will be contacted by representatives of the firm.
Do not bother the trustee. He is not equipped yet to handle individual inquiries, and any delays now, he said, will ultimately hurt consumers.
Be patient. Bankruptcy liquidations usually take months to unwind, and this one promises to be no different.
