Last week’s unexpected acquisition of Mitchell Gold + Bob Williams by Surya brought much excitement for those hoping to see the brand survive. However, amidst the celebration, it was overlooked that Surya had only acquired the brand, not the corporate entity. Consequently, they were not burdened with MG+BW’s liabilities, leaving thousands of customers with open orders in bankruptcy limbo.
Fortunately, there is some good news for these customers. The judge overseeing the bankruptcy case has approved a motion to allow Ryder Last Mile, a logistics firm, to start delivering at least some of the over 2,000 pieces of furniture currently held all over the country. In the upcoming weeks, affected customers will be informed of this development through letters.
So how did Ryder end up with such a large inventory of undelivered furniture? When Mitchell Gold + Bob Williams abruptly collapsed in August, the company had significant debts to its logistics partners, including Ryder, who were owed more than $400,000. As a result, some logistics companies had stopped delivering furniture even before the collapse. This created a difficult situation where trucking companies refused to proceed without payment, MG+BW lacked the funds to pay, and customers who had already paid for delivery were left in a state of uncertainty.
Such standoffs typically lead to complicated legal battles and distress. In this case, at least one trucking company involved in the MG+BW shutdown had to go out of business. Moreover, a previous arrangement with Ryder was complicated by objections from credit card companies, who had been issuing chargebacks, as they opposed delivering furniture to customers who had already received refunds.
However, the parties involved, including the bank, private equity owners, credit card processing companies, and the bankruptcy trustee, were able to negotiate a deal to allow access to the warehouses.
Nevertheless, there’s a significant catch for customers who wish to receive their furniture. They will have to pay an extra delivery fee as well as potential storage costs incurred by Ryder over the past three months. Ryder has indicated that it is losing thousands of dollars each day by housing MG+BW furniture in its facilities.
While the storage fee may be perceived as unfair by some customers, others with furniture worth tens of thousands of dollars stored in Ryder’s warehouses may find it worthwhile to bear the additional cost.
It remains uncertain how Surya, the new owners of the Mitchell Gold + Bob Williams brand, will address the predicament faced by former customers. While they are not legally obligated to do so, CEO Satya Tiwari mentioned that his company had acquired some MG+BW inventory and would seek a “satisfactory resolution” for purchased pieces. The specifics of this resolution and the number of affected customers are yet to be determined.
As for those whose orders are in warehouses or never made it to production, resolution is more likely to come from legal proceedings rather than from the brand’s new owners.