For those eager to see Mitchell Gold + Bob Williams live to fight another day, last week’s surprise acquisition by Surya was cause for celebration. But somewhat lost amid the enthusiasm surrounding the deal was the wrinkle that Surya had acquired the brand, not the corporate entity. It did not end up saddled with MG+BW’s liabilities, meaning it has no obligation to help the thousands of customers with open orders—they remain stuck in bankruptcy limbo.
Thankfully, last week also brought a little bit of good news on that front as well. The judge overseeing the bankruptcy case approved a motion allowing logistics firm Ryder Last Mile to start delivering at least some of the 2,000-plus pieces of furniture it’s currently holding all over the country. Letters informing those customers of the news will go out in the weeks ahead.
How did Ryder end up with so much undelivered inventory? At the time of Mitchell Gold + Bob Williams’s abrupt collapse in August, the company was deeply in debt to its logistics partners—Ryder alone was owed more than $400,000—and some had already stopped delivering furniture. The shutdown and subsequent bankruptcy filing created a gridlock. Trucking companies wouldn’t budge until their bills were paid. MG+BW had no money. And customers, who had already paid for delivery, were left in the lurch.
Standoffs like these often lead to complicated legal battles and misery. This case was no exception. At least one trucking company caught up in the MG+BW shutdown was forced out of business. And an earlier version of a deal with Ryder was complicated by the fact that credit card companies—which had been forking over millions in chargebacks—objected to the possibility that some furniture would be delivered to customers who already got a refund.
But last week, the parties involved—the bank, the private equity owners, the credit card processing companies and the bankruptcy trustee—were able to broker a deal to open up warehouse doors.
There’s a serious catch: If customers want their furniture, they’ll have to pay an additional delivery fee and potentially some of the storage costs Ryder has incurred over the past three months. (The company has said it loses thousands a day keeping MG+BW furniture in its facilities.)
For some, this will be a bitter pill to swallow. “The idea of a storage fee seems totally unfair,” said Ileana Cutler, a Mitchell Gold + Bob Williams customer who spoke during the hearing regarding the motion. “I get that it’s a difficult situation, but we didn’t ask for the delivery to be delayed by months. We are sitting in a living room with hardly any furniture.” However, for those who have tens of thousands of dollars’ worth of furniture sitting in Ryder warehouses, the additional cost will likely be worth the pain.
Ryder’s inventory is only one part of the puzzle. There are thousands of finished pieces stuck in limbo with other trucking companies. There are also orders that are paid for but were never started. Others were finished but never left MG+BW’s facilities.
Though MG+BW’s former customers are not Surya’s legal obligation, it seems likely that the brand will at least look to minimize the fallout as it restarts the company. Last week, CEO Satya Tiwari said that, as part of the deal, his company had acquired some MG+BW inventory and would look for a “satisfactory resolution” regarding pieces that had been purchased. It’s not yet clear what that resolution would entail or how many customers would be affected.
And for those whose orders are stuck in a warehouse somewhere or never made it to the production line, the ultimate answers—satisfactory or not—are more likely to come from a court docket than from the new owners of the Mitchell Gold + Bob Williams brand.