lawsuits | Apr 17, 2024 |
American Express sues Pirch for $33 million

Following last month’s abrupt shutdown, Southern California–based luxury kitchen, bath and appliance chain Pirch has faced a deluge of lawsuits—including accusations of unpaid rent, breach of contract, and a $4.2 million suit from luxury appliance manufacturer Sub-Zero. Now, American Express is suing Pirch, seeking a jaw-dropping $33 million for damages and emergency relief related to customer disputes filed in the wake of the company’s closure.

According to the lawsuit filed in federal court on April 12, Amex is “holding the bag” for more than $5 million in chargebacks requested by Pirch customers with outstanding orders, and $33 million in requests are unpaid. The credit card giant is claiming that over 1,800 customer disputes have been filed, and that Pirch has failed to release transaction and order fulfillment data, or respond to Amex’s request for communication—aside from an email in which Pirch stated that it is “retaining all records.” In the meantime, the financial company says it is accruing losses at a rate of $1.6 million per day.

The appliance chain is also facing a lawsuit from credit and debit card processor Worldpay, which is requesting reimbursement for the more than $10 million in chargebacks it has paid out of pocket thus far—and for Pirch to release the transaction, order fulfillment and delivery data the company needs to process the requests. Similar to the Amex suit, the claim says the retailer has failed to pay for the chargebacks or to “respond to or communicate with Worldpay in any substantive fashion.” In the meantime, the credit card processor is facing $500,000 per day in losses.

As weeks pass with little communication from the company, its legal trouble with customers has also escalated: In one such case, Orange County–based lawyer and former Pirch customer Marshall Krupp filed a complaint with District Attorneys Summer Stephan and Todd Spitzer to request a fraud investigation into the company’s abrupt closure. In the filing, Krupp states that he was among the customers affected by Pirch’s recent actions, having likely lost out on $46,373 in an unfulfilled order for kitchen appliances.

“I believe a formal investigation will uncover further civil and criminal finding and will assist the County of Orange and County of San Diego constituents that have been victimized by the actions and inactions of Pirch, Inc. and L Catterton,” the complaint states.

But in a surprising revelation, it seems that private equity firm L Catterton—previously a major investor in Pirch—is no longer involved with the company. In a statement sent to San Diego County’s local Fox News affiliate in response to coverage of Krupp’s complaint, L Catterton said that it sold its equity interest in Pirch in 2020 and has “no involvement in the management of its affairs today.” The retailer has since been relegated to the “historical investments” section of the firm’s website. At press time, the firm did not respond to BOH’s request for comment.

Meanwhile, Pirch laid off 40 employees earlier this month, according to a Worker Adjustment and Retraining Notification notice filed on April 4. The job cuts affected employees at the company’s showrooms in Westfield UTC, Mission Viejo and Laguna Niguel, The Orange County Register reports—other locations, including the corporate headquarters, were not mentioned in the filing.

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