October 4, 2022

oumiss

Forget Mediocre Fashion

Bankruptcy trustee wants Art Van Furniture heirs to repay millions

Two years after Art Van Furniture went bankrupt and started closing all its stores, the bankruptcy case’s trustee is now attempting to go after the family of the late Art Van Elslander for tens of millions of dollars in proceeds from the retailer’s 2017 leveraged-buyout sale to a private-equity company.

The lawsuit, filed this month in federal bankruptcy court in Delaware, focuses on the flurry of sale-leaseback transactions that were part of the deal and involved nearly 40 Art Van Furniture stores and related properties that the retailer had owned outright.

Those transactions financed 70% of the Van Elslanders’ $621 million deal in March 2017 with Boston-based Thomas H. Lee Partners. The sale-leasebacks saddled Art Van Furniture with new rent expenses — on top of a debt load from the deal — that, according to the lawsuit, immediately doomed the company and would prove unsustainable.