Levin Furniture rescue complicated by Art Van bankruptcy; Pa. attorney general looks to protect customers

Robert Levin’s plans to revive the family furniture chain he sold in 2017 may be on hold until complex bankruptcy proceedings in Delaware unwind, he said.

Also involved in those proceedings, with a scheduled hearing on Friday, is Pennsylvania Attorney General Josh Shapiro’s office, which is representing Levin Furniture customers who have reached out to him for help.

“We are making sure the consumers’ interests are protected during bankruptcy proceedings,” said Jacklin Rhoads, a spokeswoman for the attorney general. “Any consumer who believes they are owed a refund on furniture can file a complaint with our office.”

Levin, whose grandfather founded the company in Mt. Pleasant in 1920, began crafting an agreement to repurchase the chain after learning that Art Van Furniture was experiencing financial trouble. He inked a deal to buy back 44 furniture stores in Pennsylvania and Ohio two days before Art Van, on March 5, filed for reorganization under Chapter 11 bankruptcy protection.

Employees across the chain toasted Levin’s deal and the return of the founder’s family.

The deal fell apart two weeks later as coronavirus fears spread, shuttering retail outlets across the country. When that happened, Levin said Art Van reneged on a deal to fund operations at the stores through bankruptcy.

At the time, Levin said he was committed to reviving the deal and said he was setting up a $2 million fund to underwrite grants and loans for Levin’s employees who lost their health insurance when Art Van unexpectedly shuttered the stores.

Levin’s hopes to reacquire the chain anytime soon dimmed Tuesday after a bankruptcy judge suggested that Art Van consider converting its Chapter 11 filing into a Chapter 7 liquidation.

After hearing that the company lacks cash to meet its obligations, U.S. Bankruptcy Judge Christopher Sontchi told representatives of Art Van to freeze all spending and decide whether to convert its filing, Bloomberg News reported.

Levin said bankruptcy proceedings have become complicated.

“It may be that my only hope now is to see if I can reconstitute Levin’s post-bankruptcy,” he told the Tribune-Review.

Like Robert Levin, Gary Van Eslander, whose family sold the Art Van chain to Thomas H. Lee Partners, a Boston-based hedge fund, in 2017, apparently is disappointed. Citing Crain’s Detroit Business, Furniture Today reported Monday that Van Eslander put in a bid “of less than $1 million” with the court to buy back his family name.

Crain’s reported that Thomas H. Lee Partners acquired the Art Van name along with Van Eslander’s family’s chain of stores in a deal totaling about $550 million in 2017, the same year it acquired Levin’s.

As recently as 2018, Art Van, which then included Levin’s and Wolf’s stores, reported revenue of $850 million to Crain’s.

The massive bankruptcy that has shuttered Art Van, Levin’s and Wolf’s furniture stores from Michigan to Pennsylvania is among the largest in retail furniture history. It has affected everyone from the company’s suppliers and thousands of employees, who say they did not receive their final paychecks, to customers who paid deposits on furniture that was never delivered.

Levin, who had vowed to make good on deposits in his deal to take over the stores, said he worries about the customers who have been left to wonder what will happen to their orders.

“I continue to be concerned about customer deposits,” Levin said. “Though, I am glad to see the Pennsylvania (attorney general) is getting involved.”

Pennsylvania Deputy Attorney General Sam Mirarchi told bankruptcy court that many customers who made deposits on furniture never received their orders, Bloomberg News reported.