Updated on November 16, 2023 to add creditor details and potential options for customers with outstanding orders and paid deposits.
Canadian furniture store Bad Boy, known more recently as Lastman’s Bad Boy, reportedly filed for bankruptcy protection late last week. But what really has everyone talking is the fact that customers who purchased furniture will not see it delivered nor will they be able to get their deposits back, according to sources like Global News.
The restructuring process via notice filed by KSV Restructuring Inc. was filed on November 9, 2023. It claims the filing was a necessary move given the “challenging economic environment driven by high interest rates, declining sales in the housing sector, and the right retail climate.” Blatantly, KSV noted that customers who paid deposits for furniture to be delivered will not be getting refunds.
“We regret to inform you that as a result of the commencement of the NOI proceedings, Bad Boy is unable to refund those deposits or to complete those purchases,” the advisory noted.
The move does little to inspire confidence in customers to stick with local retailers versus large e-commerce shops like Amazon or big box retailers like Walmart or Costco. No one worries that Amazon is going to fold before a refrigerator is delivered or that Costco will not provide a refund for, well, anything. Perhaps this is precisely what has driven a shop like Bad Boy to shutter its doors in the first place, a conversation for another article. But if there’s ever a plan for Bad Boy to return to market once the restructuring process is over, this bad blood will all but stifle that.
This isn’t, it should be noted, people simply out of $150 deposits: Global News interviewed one man from Scarborough, ON who says he ordered a refrigerator, stove, dishwasher, washer, and dryer on sale in September and paid in full. The total? More than $6,000. His delivery date was to be December 2023. A man reportedly in a store in Whitby, ON is seen throwing furniture and screaming about the lack of refund in a video posted by BlogTO.
One would think protections would be in place in such cases, whereby monies paid for goods prior to the insolvency would have to either be refunded or goods delivered. However, Bad Boy reportedly owes many of its vendors and suppliers and thus presumably can’t source inventory to fulfill orders. According to CBC, which cites the Superior Court of Justice filings, Bad Boy owed $13.7 million total to its unsecured creditors. The most was owed to Whirlpool Canada LP at $2.3 million followed by $840,924 to Samsung Appliances, $404,410 to LG Electronics Canada Inc., and $317,382 to RioCan Real Estate Investment Trust. But why should customers be responsible for paying a retailer’s debts? Herein lies the sad reality of retail and risk.
Bad Boy Furniture was founded by Mel Lastman, the late former mayor of Toronto, way back in 1955. His son Blaine Lastman later took over the business. With a dozen stores in Ontario, there was no reason for customers to believe that their orders would not be fulfilled. Interestingly, stores remain open while a liquidation sale will be taking place in some locations. However, the website appears to be inactive at the time of this writing.
Chances are this won’t be the last we hear of angry customers looking to get their money back, or the goods they ordered delivered. It’s an unfortunate situation that will leave many customers in a serious predicament. For some who paid large sums for furniture, they spent years saving up that money. Maybe they’re waiting to furnish a new house or have appliances on the fritz and no money left to replace them with their deposits gone. For others, it might be a simple credit card dispute to get a transaction reversed, if the purchase was recent enough to warrant it and the bank agrees as such. There’s a reported $4.5 million paid in deposits by customers, and they may have some protection with their credit card companies, but this will likely be handled on a case-by-case basis. Bad Boy also says, reports CBC, that if the cost of merchandise is less than the balance owing, some customer orders may be able to ship. For many if not all, however, they’ll be out of money, merchandise, and likely both.
It’s never an easy situation when a company files for bankruptcy. But even more so when it’s a company that has been a mainstay in the province for decades. Sadly, this may tarnish the Bad Boy name for good. Who will be buying furniture there again should the company return? Noooobody.