bankruptcy | Apr 22, 2024 |
Pirch files for bankruptcy

The inevitable has happened. Almost one month to the day after Pirch halted operations, the Southern California–based appliance, kitchen and bath showroom has filed for Chapter 7 bankruptcy.

The documents, submitted in court on Monday, include a rough sketch of the company’s troubles, listing liabilities ranging from “$100 to $500 million,” owed to anywhere from 1,000 to 5,000 creditors. According to the filing, the company has assets on hand valued at $10 to $50 million.

The choice of a Chapter 7 filing (a liquidation of assets) as opposed to a Chapter 11 filing (a status often used to reorganize a business) crushes any lingering hope that Pirch could be revived in some form. Now, the company will sell off what it can in order to repay creditors—and there are many of them. A 56-page list included with the filing contains major appliance brands like Sub-Zero and Miele, hundreds of design firms, and a seemingly endless roster of Southern California homeowners. An informational meeting for creditors has been set for May 28.

The bankruptcy filing comes on the heels of an internal announcement by senior management that Pirch’s “pause” in operations would be permanent. Only days prior, the chain had been sued for more than $40 million in damages by American Express and Ohio credit card processing firm Worldpay due to customer chargebacks.

Meanwhile one former Pirch customer is looking to get law enforcement involved. Last week, Marshall Krupp, a resident of Orange, California, filed complaints with both the San Diego and Orange County district attorneys to investigate the company for breach of contract and fraud. In a note sent to law enforcement and the media today, Krupp says he’s hoping the authorities will add embezzlement and conspiracy to the mix.

“I believe that evidence will show that [the] business conducted [by] Pirch, Inc. was built on a Ponzi scheme,” writes Krupp. “I believe that there is evidence to show that on the weekend prior their closure, they were conducting business, taking 100 [percent] deposits on customer purchases of high-end appliances and promising deliveries when they knew that they could not fulfill their promises and commitments and that the closure of Pirch, Inc. was [imminent].”

In the letter, Krupp also named private equity firm L Catterton, at one time a stakeholder in Pirch. In a statement to Business of Home, L Catterton denied any involvement. “We sold our equity interest in Pirch in 2020 and have no involvement in the management of its affairs today.”

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