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Consumers Could Lose Big in Huffman Koos Bankruptcy

August 17, 2004

Huffman Koos • Bankruptcy Proceedings "Unfair," Attorney General Charges • Breuners, Huffman Koos, Good's Furniture Chain Declares Bankruptcy • Consumer Complaints

Consumers are in danger of losing nearly $2 million worth of deposits they made with the bankrupt Huffman Koos furniture chain. Connecticut Attorney General Richard Blumenthal is urging consumers to immediately file proof of claim forms in U.S. Bankruptcy Court.

The furniture chain, which operates stores under the Breuners, Huffman Koos and Good's names, will not redeem or honor the deposits as per a recent bankruptcy court ruling. The company filed for bankruptcy in July.

A proof of claim allows a consumer to seek deposit recovery through the court if there are sufficient assets when Huffman Koos' parent company settles its debts after its close-out sales cease on Dec. 31.

Despite opposition by Blumenthal's office - joined by the Attorneys General of California and New Jersey - the bankruptcy court upheld the now-past July 30 deadline for pre-June 28 depositors to redeem their deposits for store credit. Blumenthal's office argued that this deadline was untimely and unfair, and that notice of the deadline to consumers was misleading.

Also despite Blumenthal's efforts, those consumers who did redeem deposits for store credit before the deadline were forced to redeem it at double the face value of the initial deposits - for products they didn't seek to buy in the first place.

"I am deeply disappointed by the bankruptcy court's ruling because it is unfair and unconscionable in permitting Huffman Koos to provide customers with such inadequately short notice to obtain credits," Blumenthal said. "Requiring customers to spend twice as much as the amount of their credits is an onerous and outrageous condition. Consumers trusted Huffman Koos when they deposited hard-earned money to make purchases, and now have been summarily cast aside so that other creditors can be paid."

"The Court rejected our argument that customers were given an unfair and unreasonably-limited deadline to redeem deposits for credits and instead focused on what it said was best for the financial condition of the bankrupt Huffman Koos estate - at the expense of customers with deposits on furniture they may never receive. Huffman Koos' mistreatment of consumers has been egregious and I urge all consumers to be cautious in any future dealings with Huffman Koos in the upcoming months."

Customers may obtain a proof of claim form and instructions through the Court's website at www.dep.uscourts.gov. Once on the site, consumers may click on "case information," and on that page click on "claims information" and then "claims form." Customers must fill out the form by following the instructions and provide the name of the Debtor, "Breuners Home Furnishings Corp," and the case number, 04-12030(PJW).

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