What about us? Customers question proposed bankruptcy settlement for Home Décor Outlets

PITTSBURGH — Pittsburgh customers of Home Décor Outlets are wondering what a proposed bankruptcy settlement for the furniture store means for them.

“I kind of feel shafted, because they didn’t explain what they were talking about,” Home Décor customer Stacey Dorsey said.

On Monday morning, Dorsey, along with several other customers, listened in by phone to a federal bankruptcy court hearing in Atlanta.

11 investigates broke the story that Home Décor Outlets filed for bankruptcy and closed its Liberty Avenue store in Pittsburgh without warning. At least 17 other locations up and down the East Coast also closed. That has left many customers without their merchandise or the money they put down on layaway.

About 30 Pittsburgh customers have filed complaints about Home Décor Outlets with the Pennsylvania Attorney General’s Office.

At the hearing Monday, Home Décor attorney Henry Sewell announced a tentative settlement with the company’s biggest creditor, Crossroads Financial Group, which is owed about $1.6 million.

Sewell told the court that Crossroads has agreed to take about $700,000, about 43% of the amount still owed. In exchange, Home Décor would be able to keep its merchandise and any proceeds, with plans to reorganize and move forward with the two locations it has left in South Carolina and Missouri.

The proposed settlement comes after Crossroads petitioned the court in August to convert Home Décor ’s bankruptcy from Chapter 11 to Chapter 7 liquidation. If approved, Chapter 7 liquidation would force the company to sell off all its assets to pay its creditors back.

In response to that move, settlement talks were initiated. Now, two weeks later, the proposed settlement was announced.

What about us?

Customers listening in on the call were left confused and said they felt like their interests were not being addressed.

“What about us? What happens to us?,” asked customer Gwendolyn Marks, who told the court she paid off a bedroom suite, but never received her furniture.

Pittsburgh customer Stacey Dorsey, who paid about $386 for furniture on layaway but also didn’t receive her merchandise from Home Décor , told Channel 11 she feels like the proposed settlement lets them off too easy and believes they should be closed down.

“They shouldn’t be able to do anything at all,” Dorsey said. “Because they already scammed me and other people out of their money, which means the scam is going to continue going on and on, with no penalties, basically.”

Dorsey continued to get invoices from Home Décor long after they closed down, trying to get her to pay more money. No one from the corporate headquarters would respond to her repeated phone calls and emails.

11 Investigates has also reached out to Home Décor Outlets and its attorney multiple times, but has received no response.

Channel 11 viewers stepped up to help Dorsey after we told her story in June. Several people made donations, making it possible for her to buy two beds and living room furniture from other retailers. She told 11 Investigates she is grateful.

“I’m so thankful for the generosity of all the people who helped me, but I still worry about all the other people who didn’t get their furniture,” Dorsey said.

Dorsey said she now hopes other customers will be satisfied, too.

“I’m hoping for everybody to get their money, and I’m hoping for somebody to fight for us,” Dorsey said.

The Pennsylvania Attorney General’s office had a representative present for today’s hearing.

Spokesperson Jacklin Rhoads, Communications Director of the Pennsylvania Office of Attorney General, provided this statement to Channel 11:

“While it has not yet been determined whether consumer deposits will be repaid in full, it is our number one priority is to make sure the consumers’ issues are brought to the attention of this court and that their claims are being addressed appropriately during these proceedings.”

The proposed settlement is not a done deal yet. It still must be submitted to the court and approved by the judge. Before that, other creditors, including customers, will have the opportunity to object if they don’t believe it’s fair.

If the court approves the settlement, Home Décor will remain in Chapter 11 and file a reorganization plan with the court for its approval.

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