Customers who have spent a lot of money on kitchen upgrades are reeling from the news that Wren Kitchens filed for Chapter 7 bankruptcy. All 15 of its U.S. locations have closed, as have “studio” displays inside Home Depot stores.
The company is still touting itself as the number one kitchen retailer in the UK, as the bankruptcy affects only the US operations, most of which are located on the east coast.
If you have a pending order or installation with Wren Kitchens, here’s what you need to know.
Will Wren Kitchens customers receive refunds?
Wren Kitchens closed all US operations and laid off employees without notice. Will customers with pending orders receive refunds? At this point, there is little indication that they will.
A customer in the Philadelphia area told NBC10 he had a pending order with a $13,000 deposit that the now-defunct company had collected.
“As soon as they got our money, a month later, they closed. I haven’t slept since,” he said. He added that attempts to contact the company were only available through a contact form on the company’s website. Has not received a response.
The customer said he and his wife had saved for five years to buy a new kitchen, but now have little hope of getting their $13,000 deposit back.
Customers in Connecticut reported losing deposits of $20,000 or more.
What is a Chapter 7 bankruptcy?
A Chapter 7 bankruptcy is one of four legal designations for entities or individuals facing overwhelming debt:
-
Chapter 7 is a complete liquidation. of the assets of a company or an individual. The proceeds of the sale are distributed to creditors.
-
Chapter 11 involves a reorganization plan. approved by a court to rebuild financial stability.
-
Chapter 13 is another attempt to pay creditorsOften used by a person with a stable income, it presents a future payment plan based on a percentage of income.
-
Chapter 12 is dedicated to family farmers or fishermen. seeking to propose a payment plan to creditors, generally three years.
Should you notify your bank or credit card company?
Absolutely. You can ask your bank or credit card company to reverse payments or issue a chargeback dispute.
If you have an outstanding or unfulfilled order, please retain all documents related to check or credit card payments made to Wren Kitchens. That could include invoices, emails, and financing agreements.
Sign up to receive an alert about the opening of the creditor claims process
Follow the bankruptcy filing by clicking “start monitoring this case” here. That will notify you of any new information related to the liquidation, including the opening of the creditor claims process.
Of course, the companies with the largest debts will likely be the first to receive recovery efforts.
Other actions you could consider
Use this Wren Kitchens contact form to create a support request. While an answer may be wishful thinking, keeping a record of all contacts with the company can be helpful in taking future action, including any potential class action lawsuit.
You can also contact your state Attorney General’s office or your state Department of Consumer Protection.
The Connecticut Department of Consumer Protection encourages consumers to send a written letter by certified mail to the place where they made their purchase, requesting a refund within 10 days.
The risk of large down payments or deposits
In any extensive home improvement project, there is always a risk when making a large payment to a merchandise supplier or contractor. While Wren Kitchens’ bankruptcy is not a typical situation, the stories of customers with destroyed kitchens, waiting for new cabinets and appliances, are heartbreaking.
The Federal Trade Commission offers helpful information on how to deal with large-scale home improvements, contractors, and home improvement loan scams.
However, large retailers filing for Chapter 7 bankruptcy leave consumers at high risk.
“In a Chapter 7 case, if you have a claim for refund, return, or deposit, you must file a claim with the bankruptcy court,” Brian D. Spector and David Edelberg, partners at the Scarinci-Hollenbeck law firm in New York City, wrote last year after a series of retail bankruptcies. “However, clients, who are considered unsecured creditors, are generally at the back of the line in terms of who receives payment from the bankruptcy estate.”