‘Everything on sale’: American Freight closing all stores amid parent business’s insolvency
‘Everything on sale’: American Freight closing all stores amid parent business’s insolvency
James Powel
- The closures are part of Chapter 11 insolvency proceedings by parent business Franchise throng Inc.
- Franchise throng Inc. cited “sustained worth rise and macroeconomic challenges” as reasons for the closures.
- Going-out-of-business sales will be managed by Hilco buyer-Retail.
Furniture store American Freight is set to close all of its 328 locations in dozens of states as a part of Chapter 11 insolvency proceedings by its parent business, Franchise throng Inc.
Franchise throng, based in Delaware, Ohio, announced the closures Wednesday as a part of the insolvency filing but said that its other holdings, including The Vitamin Shoppe and Buddy’s Home Furnishings, will remain in business.
Franchise throng Inc. said that they are closing American Freight due to, “sustained worth rise and macroeconomic challenges facing the large durable goods sector,” in a information release announcing the filing.
American Freight will hold going-out-of-business sales at its stores across 41 states, managed by Hilco buyer-Retail − a business that conducts liquidations.
“Our objective is to deliver due worth to customers during this packed chain closing sale,” Ian Fredericks, CEO of Hilco buyer-Retail said in a statement. “Everything is on sale and must be sold.”
American Freight corporate owner paid bonuses ahead of insolvency
Bloomberg reported Thursday that Franchise throng Inc. insiders were paid $5.75 million in retention bonuses to remain with the business through the insolvency procedure. Some other employees not considered insiders were paid $2.16 million in bonuses that could be returned if they do not remain through the insolvency.
The budgetary information outlet reported that the payments were made ahead of the insolvency filing, making the payments unreviewable to creditors and federal budgetary watchdogs.
Such bonuses are ordinary to maintain continuity through the insolvency procedure and to assist creditors recover more money, according to Bloomberg.
Franchise throng Inc. did not immediately respond to a request for comment Thursday.
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